A Letter from Larry Merlo, President and CEO

Dear Stakeholders,

With health care costs rising and the market evolving rapidly, patients, payors, and providers are each presented with challenges as they look to lower health care costs, enhance quality and maintain access to care. We believe no one is better positioned than CVS Health to respond to these challenges, as well as those that millions of Americans face throughout their lifetimes. Our leading capabilities span retail pharmacy, pharmacy benefits, specialty, infusion, medical benefits, retail clinics, and long-term care. Moreover, we offer more ways to touch patients and improve health outcomes than any of our industry peers.

Our company purpose is helping people on their path to better health and serves as the lens through which we make our business decisions. Our purpose also guides us in ensuring that our corporate social responsibility (CSR) commitments align with our enterprise growth strategy. This includes the work we do every day to make quality health care more affordable, more accessible, and more sustainable.

Our Prescription for a Better World framework is integral to fulfilling our purpose and serves as the organizing principle of our annual CSR Report – now in its ninth year. It is supported by three pillars: Health in Action, Planet in Balance and Leader in Growth. The Health in Action pillar of our framework covers our core focus areas of helping patients prevent and manage chronic disease, ensuring quality and safety of care, and leveraging our growing size and scale for the benefit of our patients and customers.

In 2015, we continued to focus on innovations that increase affordability and access to care, including the deployment of telehealth, and launched a suite of digital pharmacy tools to help make medication adherence easier and more convenient. To make it more convenient for our customers to access healthier on-the-go snacks, we continue to expand our Gold Emblem Abound™ line, which grew from the 40-plus choices introduced in 2014 to more than 100 products today. We also advanced our commitment to create a tobacco-free generation, and launched several new partnerships aimed at reducing the national youth smoking rate. And finally, we continued our work to reach underserved populations through our Project Health events, which over the course of a decade have reached more than 750,000 patients with much-needed health care services totaling a value of nearly $80 million.

Our Prescription for a Better World also reinforces our belief in the connection between human health and the health of our planet.

The Planet in Balance pillar of our framework outlines our commitment to assessing and reducing our direct and indirect environmental impacts.

Three years ahead of schedule, we surpassed our target of reducing our greenhouse gas (GHG) intensity by 15% per square foot of retail space by 2018, achieving a 17% reduction by year-end 2015. We are applying key learnings from green building practices in new store designs and retrofits, and made tremendous progress in 2015 in converting a significant percentage of our stores to more efficient light-emitting diode (LED) lighting.

Our Leader in Growth pillar guides us in operating our business with integrity and implementing best-in-class workplace practices. In 2015, we continued to support former service members and their families who are moving into private sector jobs. In fact, we are on track to open a first-of-its kind skill development and hiring center near Fort Bragg in 2016 to assist with this effort. We also continued to help people transition from public assistance to meaningful jobs and career paths through workforce programs, an initiative that began in 1999. This year we will reach a milestone of helping 100,000 people make this transition. And finally, we have strengthened our supplier diversity program and grew the volume of purchases from diverse suppliers.

CVS Health’s leadership in workforce development also garnered national attention during President Barack Obama’s annual 2015 State of the Union address. During his remarks, the President asked businesses to follow our company’s lead and offer more educational benefits and paid apprenticeships.

We do all this with the support and oversight of our Board of Directors, who provide feedback on our CSR strategy and ongoing commitments. In addition to engaging our Board members, we have also been engaging with a broad range of stakeholders to better understand the expectations they have of our company.

This report is meant to provide detail and explanation for the benefit of all our stakeholders. I hope you will take the time to read this report, and learn more about our continued commitment to play a leadership role in shaping the future of health care.

Sincerely,

Larry Merlo
President and Chief Executive Officer