2016 Annual Report Health is where WE ARE the heart is. A pharmacy innovation company OUR STRATEGY Reinventing pharmacy OUR PURPOSE Helping people on their path to better health CVS Health OUR VALUES Innovation Collaboration Caring Annual Report 2015 2016 Integrity Accountability Hazardous Air The CVS Health 2016 Annual Report achieved the following Trees Water Energy Solid Waste Greenhouse Gases Pollutants Saved Saved Saved Not Produced Not Produced Not Produced results by printing on paper containing 10 percent post- ® consumer recycled content. FSC is not responsible for any 82 38,287 31,000,000 2,563 7,059 7 calculations of results from choosing this paper. fully grown gallons MM BTUs pounds pounds pounds CVS Health, One CVS Drive, Woonsocket, RI 02895 | 401.765.1500 | cvshealth.com Shareholder Information Officers Larry J. Merlo J. David Joyner David A. Falkowski President and Chief Executive Officer Executive Vice President, Sales and Senior Vice President and Account Services – CVS Caremark Chief Compliance Officer Lisa G. Bisaccia Executive Vice President and Robert O. Kraft John P. Kennedy Chief Human Resources Officer Executive Vice President and Senior Vice President and Chief Tax Officer President – Omnicare Eva C. Boratto Colleen M. McIntosh Executive Vice President – Controller Thomas M. Moriarty Senior Vice President, Corporate Secretary and Chief Accounting Officer Executive Vice President, Chief Policy and Assistant General Counsel Officer and General Counsel Troyen A. Brennan, M.D. Thomas S. Moffatt Executive Vice President and Jonathan C. Roberts Vice President, Assistant Secretary and Chief Medical Officer Executive Vice President and Assistant General Counsel Chief Operating Officer David M. Denton OFFICERS’ CERTIFICATIONS Executive Vice President and Andrew J. Sussman, M.D. The Company has filed the required certifications Chief Financial Officer Executive Vice President, Clinical Services under Section 302 of the Sarbanes-Oxley Act of 2002 and Associate Chief Medical Officer regarding the quality of our public disclosures as Helena B. Foulkes Exhibits 31.1 and 31.2 to our annual report on Form Executive Vice President and Nancy R. Christal 10-K for the fiscal year ended December 31, 2016. President – CVS Pharmacy Senior Vice President – Investor Relations After our 2016 annual meeting of stockholders, the Company filed with the New York Stock Exchange the Stephen J. Gold Carol A. DeNale CEO certification regarding its compliance with the Executive Vice President and Senior Vice President and Treasurer NYSE corporate governance listing standards as Chief Information Officer required by NYSE Rule 303A.12(a). Directors We deliver value to all health Richard M. Bracken (1) (2) Anne M. Finucane (1) (3) Tony L. White (2) (3) Former Chairman and Chief Executive Officer Vice Chairman Former Chairman, President and HCA Holdings, Inc. Bank of America Corporation Chief Executive Officer Applied Biosystems, Inc. C. David Brown II (1) (3) Larry J. Merlo Chairman of the Firm President and Chief Executive Officer care stakeholders. Broad and Cassel CVS Health Corporation (1) Member of the Nominating and Alecia A. DeCoudreaux (2) (4) Jean-Pierre Millon (2) (4) Corporate Governance Committee Former President Former President and Chief Executive Officer (2) Member of the Patient Safety and Mills College PCS Health Services, Inc. Clinical Quality Committee The CVS Health “heart mark” is a ubiquitous presence across our enterprise, representing Nancy-Ann M. DeParle (2) (4) Richard J. Swift (4) (3) Member of the Management Planning Partner Former Chairman, President and Chief and Development Committee Consonance Capital Partners, LLC Executive Officer the unique value we provide to patients, payors, and providers alike. We accomplish (4) Member of the Audit Committee Foster Wheeler Ltd. David W. Dorman (1) (3) this through our unmatched suite of leading assets and our success at integrating them Chairman of the Board William C. Weldon (1) (3) CVS Health Corporation Former Chairman and Chief Executive Officer to offer innovative health care solutions. This annual report describes some of the ways Johnson & Johnson in which our model allows us to enhance access, improve health outcomes, and lower overall health care costs, while positioning CVS Health for long-term growth. We think Shareholder Information you will agree that health really is where the heart is when seeking affordable, accessible, Corporate Headquarters Transfer Agent and Registrar Financial and Other Company CVS Health Corporation Questions regarding stock holdings, certificate Information One CVS Drive, Woonsocket, RI 02895 replacement/transfer, dividends and address The Company’s Annual Report on Form 10-K and effective care. (401) 765-1500 changes should be directed to: will be sent without charge to any shareholder upon request by contacting: Annual Shareholders’ Meeting Wells Fargo Shareowner Services May 10, 2017 P.O. Box 64874 Nancy R. Christal CVS Health Corporate Headquarters St. Paul, MN 55164-0874 Senior Vice President – Investor Relations CVS Health Corporation Stock Market Listing Toll-free: (877) CVS-PLAN (287-7526) 670 White Plains Road – Suite 210 The New York Stock Exchange International: +1 (651) 450-4064 Scarsdale, NY 10583 Symbol: CVS Email: [email protected] Website: www.shareowneronline.com (800) 201-0938 see eye Direct Stock Purchase/Dividend In addition, financial reports and recent Reinvestment Program filings with the Securities and Exchange Shareowner Services Plus PlanSM provides a Commission, including our Form 10-K, convenient and economical way for you to as well as other Company information, purchase your first shares or additional shares are available via the Internet at of CVS Health common stock. The program is investors.cvshealth.com. sponsored and administered by Wells Fargo Bank, N.A. For more information, including an enrollment form, please contact Wells Fargo Bank, N.A. at (877) 287-7526. designed and produced by designed and produced Pharmacy Advisor has increased adherence by nearly 10% Cost management solutions have lowered client trend to an average of only 3.2% $9 billion in aggregate client savings driven by managed Our solutions reflect formularies since 2012 evolving health care needs. In an era of rising costs, CVS Health is the optimal will accelerate as the population ages. partner to deliver savings and help improve outcomes To reduce costs and improve out- for all health care stakeholders. comes, CVS SpecialtyTM has moved well beyond a basic specialty offering. Our enhanced care management In our retail pharmacies, innovations leadership in providing solutions to model includes, among other things, such as first-fill counseling, our sig- ensure that the patients we serve more than 250 rare-disease nurses, nature Pharmacy Advisor® program, have access to the right drug at the comorbidity management, symptom and ScriptSync® are just a few of the lowest cost. We have led the way management, and social support. ways in which we drive best-in-class in formulary innovations and were This high level of patient engagement adherence rates and help improve the first PBM to exclude high-cost results in fewer emergency room visits outcomes for patients. Meanwhile, drugs from our formulary in favor of and hospitalizations and can produce CVS Caremark® draws on a broad less expensive clinical equivalents. up to an 11 percent reduction in the range of capabilities to manage costs Specialty patients drive a large por- overall health care costs associated for PBM clients. They include our tion of health care costs, a trend that with a given managed condition. 2016 Annual Report 1 Complex patient and market issues require a broad set of interventions Patient Issues Payor /Market Issues Clinical Multi-drug Spend across Biosimilars Pipeline of Emerging complexity regimens pharmacy and new drugs and specialty medical benefits indications provider models It takes all the pieces to see a complete picture of the patient. Through our integrated Take Maintenance Choice®, which it with our clinical research to assets, we offer exclusive offers PBM plan members the option identify opportunities for improving programs that provide of receiving their 90-day prescriptions clinical care. That enables our an enhanced member by mail or by picking them up at 36,000 pharmacists and clinicians their local CVS Pharmacy® location. to have important conversations experience and better The number of people enrolled with patients that help lead to results. continues to increase because better health outcomes and lower of its convenience and ability to costs for payors. And regardless improve adherence rates. Specialty of the channel a patient chooses, Connect® offers a similar benefit our pharmacists have access to a to patients with prescriptions for single, unified record for prescriptions complex specialty medications. and care. Our digital assets are Through our Health Engagement integrated as well, allowing patients EngineTM, we seamlessly aggregate to download a single app to manage data from across the enterprise and all their prescription needs, including other payor sources and combine retail, mail, and specialty. 2 CVS Health We leverage our full circle of care for partners. We can partner with all PBMs and health plans, leveraging our enterprise assets and capabilities to meet their individual needs. 2.4 billion The winners in pharmacy care will in-store prescription offering, we will adjusted prescriptions be those