Cvs Is The Largest Pharmacy Health Care Provider

2273 Words Feb 18th, 2015 10 Pages
Introduction

“CVS was founded in 1963 by Stanley and Sidney Goldstein and Ralph Hoagland. The first CVS store was opened in Lowell, MA.” (CVS Health) CVS is a pharmacy innovation company helping people on their path to better health. CVS’s CEO is Mr. Larry J. Merlo. CVS is headquartered in Woonsocket, RI. CVS is the largest pharmacy health care provider in the U.S. And is an integrated offerings across the spectrum of pharmacy care. Through their 7,700 retail pharmacies and more than 900 walk-in medical clinics. There are approximately 200,000 employees in 46 states, the District of Columbia and Puerto Rico. “CVS has also expanded its business to include pharmacy benefit management, mail order as well as specialty pharmacy division,
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The second types of inventory methods to value its inventory that CVS uses is the most common one used for most business the First-In, First-Out (FIFO). First-In, First-Out (FIFO) is defined as the first inventories bought are the first ones to be sold. CVS only uses FIFO for Some Retail Pharmacy and Rest of Business (Front store). CVS utilizes this method because; the fresher products have to be out the door first. Also, FIFO is an easier method than Weighted Average Cost. And most importantly it may over inflate cost because the last products bought and out the door first are usually the most expensive products.
“Effective January 1, 2012, the Company changed its methods of accounting for prescription drug inventories in the Retail Pharmacy Segment. Prior to 2012, the Company valued prescription drug inventories at the lower of cost or market on a first-in, first-out (“FIFO”) basis in retail pharmacies using the retail inventory method and in distribution centers using the FIFO cost method.” (Annual Report Archive)
Walgreens on the other hand only focuses on one inventory method. Walgreens uses the Last- In, First-Out (LIFO) method for the entire business. In the LIFO method items bought last are sold first, which also means that the items still in stock are the oldest ones. Walgreens focuses in the method because it limits lower of cost or market approach, but not better than weighted average cost. Basically they

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