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Dear Fellow Stockholders:

In my first letter as president and chief executive officer, let me begin by expressing how honored I am to lead this great company and our dedicated team of nearly 300,000 CVS Health colleagues as we work together to reimagine health care. During one of the most challenging years in our nation’s history, our purpose to help people on their path to better health has never been more important. Since the pandemic struck, CVS Health colleagues served a prominent role in supporting our customers, providers, and communities, while we outperformed on our financial commitments.

Over the past decade, we have been on a journey to become the nation’s leading diversified health services company. As one of the most trusted brands in America, our presence in communities across the country allows us to meet consumers where they are and support them for every meaningful moment of health throughout their lifetime.

Continued growth in our core businesses drove our strong performance in 2020

In 2020, CVS Health year-over-year total revenues grew by 5 percent to $268.7 billion. GAAP diluted earnings per share (EPS) from continuing operations grew by 8 percent to $5.47 and Adjusted EPS grew by 6 percent to $7.50*. We achieved over $900 million of integration synergies and generated $15.9 billion in cash flow from operations, which we deployed to invest in our future, maintain our quarterly dividend, and reduce debt. In total, we have repaid over $12.2 billion in net debt since the close of the Aetna transaction. We remain on track to achieve our target leverage ratio in 2022 and committed to returning value to our stockholders.

Our strong results demonstrate that our strategy and business model are working.

  • In the Health Care Benefits segment, we grew total revenue by 8 percent for the year, with strong growth coming from our Government businesses.
  • Our Pharmacy Services segment has been resilient throughout the pandemic. We demonstrated the value we bring to our customers and members, achieving strong retention rates and positive momentum in winning new business.
  • In our Retail/Long-Term Care segment, we continued to advance our clinical programs that improve medication adherence and health outcomes. We increased the level of engagement with our loyalty and subscription customers, achieving high customer satisfaction results.

Advancing our consumer-oriented strategy to deliver health services with improved access, affordability, and outcomes.

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Delivering strong
financial performance

  • Exceeded our Adjusted EPS expectations
  • Achieved run rate synergies of over $900M
  • Generated strong cash flow from operations of $15.9B
  • Continued progress on our de-leveraging plan
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Strengthening core

  • Continued growth in our PBM and Government Services businesses, achieving solid results in Medicare Advantage
  • Drove operational efficiencies and enhanced productivity while driving excellent service
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Expanding consumer
health services

  • Improved access to quality and holistic care with ~600 HealthHUB locations opened in 2020
  • Delivered new market solutions for testing and vaccine administration, and virtual care in response to the COVID-19 pandemic
  • Advanced targeted care management programs in the areas of diabetes, kidney care, and oncology
pharmacy  team
A CVS pharmacy team administers the first COVID-19 vaccine dose to a resident at a long-term-care facility in Connecticut.
Transform Oncology Care is available in
28 states

Delivered new solutions and established an unparalleled response to COVID-19

During the past year, we delivered new market solutions and strengthened our role as a trusted health care partner in response to COVID-19.

We rapidly innovated to meet customer needs for COVID-19 testing in the community. Today, we remain the largest community testing organization in the United States. Through our fourth quarter earnings call, we had administered approximately 15 million tests at our more than 4,800 testing locations nationwide. Over 50 percent of these tests were administered in communities with significant need for support, according to the CDC Social Vulnerability Index. Additionally, we launched our Return ReadySM solution to help employers and universities as they execute their return-to-work and school strategies. Such leadership enabled us to establish new relationships with approximately 8 million consumers who previously were not CVS Health customers.

We started working with the federal government on vaccine distribution readiness in the fourth quarter of 2020 and were selected as one of the partners for vaccine administration in long-term care facilities. We administered more than 4 million vaccine doses to patients and staff in over 40,000 long-term care facilities across the country through the end of February. We were also selected as one of the national partners for the Federal Pharmacy Partnership program through which we administer COVID-19 immunizations in our CVS Pharmacy locations. With the commitment and hard work of our employees, we have the capacity to administer 20 to 25 million doses per month, depending on availability.

I am grateful for our colleagues, particularly those on the front lines, who worked tirelessly to help millions of Americans through extraordinary circumstances and all that we have achieved this past year.

Making significant progress creating new CVS Health services and integrated value

We have made measurable and important progress with our strategy as a health services company that integrates and utilizes all our assets to create a superior customer experience that firmly addresses the total cost of care.

  • We are creating health platforms that combine local points of care, remote monitoring, virtual care, and access to health care professionals – all within a personalized consumer-centric model. Examples of these new programs include Transform Diabetes Care®, Transform Oncology Care®, and the CVS Kidney Care® program.
  • We have seen strong reception to our first fully integrated plan, the Aetna Connected Plan®, and expect to make this plan available in an additional 15 markets in 2021. Key features include zero-dollar copays at MinuteClinic® locations**, standard formulary, and use of the CVS Health Coram® infusion services.
  • We have deepened our pharmacy penetration into the Health Care Benefits segment through increased cross-selling of medical and pharmacy plans. This is expected to result in approximately $350 million in incremental revenue in 2021.
  • We launched new medical benefit plans designed with low-copay or no-copay at MinuteClinics to offer broader access to care. We have approximately 6 million Aetna Commercial and Medicare members enrolled to date.
  • We ended 2020 with just over 650 HealthHUB® locations nationwide, including locations in underserved communities. The HealthHUB is one of the many channels we have to engage with consumers for their health, that also improve access to quality and holistic care.
  • We continue to expand our virtual care capabilities with our E-Clinic service in our MinuteClinic footprint and our virtual-first primary care program where members can engage with providers virtually.

These examples clearly show that we are delivering value by creating superior health offerings that help consumers get quality, affordable, and convenient care.

2020 CSR Report

Deepening our commitment to Corporate Social Responsibility

In addition to spearheading initiatives related to COVID-19, we furthered our leadership in sustainability and corporate social responsibility. For the second straight year, CVS Health was named in the prestigious Dow Jones Sustainability World Index. We renewed and strengthened our commitment to addressing the racial health disparities and social injustices that weaken our nation and affect health. Over the next five years, we are investing nearly $600 million to advance employee, community and public policy initiatives that address inequality faced by Black Americans and other underserved communities. In 2020 we also made great strides in advancing a holistic strategic diversity management strategy that supports our business objectives and creates new opportunities for our colleagues. Diversity powers our ability to support patients and customers with empathy, respect and cultural sensitivity, helping to build healthier communities. Our workforce development programs support our efforts to cultivate and recruit the best health care talent in the country.

We took steps to address diversity among our senior leadership and worked to develop benchmarks and measure outcomes in diverse representation at all levels of our organization. For the first time, we’ve tied performance in this area to executive compensation.

You can read about our activities on pages here. For a comprehensive overview, read the CVS Health 2020 Corporate Social Responsibility Report on our corporate website.

Strong momentum for 2021 and beyond

In summary, we are starting 2021 with strong momentum. We are accelerating our pace of progress to drive our consumer-centric strategy – a strategy built upon the fundamental belief that solving consumer health needs will create value for our customers, our communities, and our stockholders.

I want to thank Larry Merlo and the Board of Directors for setting a bold path for CVS Health to change health care in this country. Larry did an incredible job of bringing together our unique assets and establishing the foundation for our future. You can read more about Larry’s achievements here, where he also shares a few parting thoughts.

I am confident in our future and in our ability to help people on their path to better health. On behalf of the Board and our colleagues, thank you for investing in CVS Health.


President and Chief Executive Officer

Karen S. Lynch
President and Chief Executive Officer

April 2, 2021


* Adjusted EPS is a non-GAAP financial measure. A reconciliation of GAAP diluted EPS from continuing operations to Adjusted EPS is provided under the heading “Reconciliation” in the back pages of this Annual Report.

** Not applicable to HSA plans