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PETRI DISH PERSPECTIVES

Episode 25: CVS Health

October 16, 2025 • Manead Khin • Season 1 • Episode 25

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From a small pharmacy in Massachusetts to a $100 billion healthcare empire, CVS Health has redefined what it means to be a pharmacy. In this episode of Petri Dish Perspectives: Biotech Unleashed, host Manead dives into CVS’s fascinating evolution, from its early days as Consumer Value Store to its bold moves acquiring Aetna and transforming into a fully integrated healthcare provider.

We explore how CVS blended retail, insurance, and clinical services to build one of the most powerful healthcare ecosystems in the United States and how it continues to shape the future of accessible care through digital transformation, AI, and pharmacy innovation.

We uncover how a simple idea, providing affordable, convenient health access, turned into one of the most ambitious healthcare transformations of our time.

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Intro

Hello and welcome to Petri Dish Perspectives: Biotech Unleashed, the podcast where we geek out about science and the companies shaping the future of healthcare. I’m your host, Manead, and I’m a PhD scientist by training, biotech storyteller by choice. With every new episode released on Thursday, my goal is to deliver digestible pieces of information on healthcare companies under 30 mins.

When you think of CVS, maybe you picture that red sign glowing on a street corner, the endless receipts, or a late-night run for cold medicine. But behind that familiar logo is a company that quietly rewired how America gets its healthcare.

CVS Health didn’t start out as a healthcare giant. It began as a humble family business, a single store selling shampoo, toothpaste, and aspirin. Yet today, it sits at the center of one of the largest healthcare ecosystems in the world, influencing everything from insurance to prescriptions to how people access care.

Why listen to this episode? Because the story of CVS Health is a blueprint for reinvention. It’s about how a retail chain became a healthcare titan not by inventing new drugs, but by mastering access, trust, and convenience. From the first store in Rhode Island to multibillion-dollar mergers that redefined modern medicine, this is how CVS reshaped American healthcare, one prescription at a time.

Quick disclaimer, I give full credit to the original articles cited in the references in the transcript!

Grab a coffee or tea, settle in, and let’s jump in!

Segment 1: Humble Beginnings The Founders and the First Store

The story begins in 1963, in Lowell, Massachusetts, a working-class city filled with textile mills, diners, and small family-owned shops. Stanley and Sidney Goldstein, two brothers raised in nearby Rhode Island, wanted to build something of their own. Both had worked in retail, and they saw how postwar America was changing. Convenience was becoming a lifestyle.

Together with Ralph Hoagland, a marketer with experience at the Melville Corporation, they launched the first Consumer Value Store, or CVS. The name said it all: value for the everyday consumer.

The first store was simply a small space in a strip mall that sold health and beauty products at fair prices. But their philosophy was modern for its time: make everyday health accessible. Customers could buy shampoo, cough syrup, and vitamins without inflated prices or fuss.

The formula worked. Within a year, CVS had expanded to 17 stores across New England. It wasn’t just about retail; it was about reliability. People trusted CVS to be there when they needed something for their families.

By 1969, Hoagland convinced the Goldstein brothers to sell CVS to Melville Corporation, a retail holding giant that owned Thom McAn shoes and Marshalls. It was a pivotal moment. Under Melville, CVS gained capital, supply chain power, and retail expertise. But perhaps more importantly, the brothers’ small experiment was now part of something much larger.

Through the 1970s, Melville invested heavily in CVS’s expansion. The Goldstein brothers stayed involved, building a culture centered on customer service and trust. In 1972, a key milestone arrived: CVS acquired 84 Clinton Drug and Discount Stores, officially moving into the pharmacy business.

For the first time, CVS wasn’t just selling aspirin it was dispensing prescriptions. That shift would define its future. The name “Consumer Value Store” started to mean something more. It wasn’t just about price; it was about healthcare access for everyday Americans.

CVS Health has had several IPO dates and mergers, making it complex to pinpoint a single one. The company's initial IPO for its predecessor, Consumer Value Stores, was on January 13, 1978. Following a merger, it became a public company under the current name, CVS Health, on November 20, 1996.

Segment 2: Reinvention From Retail Chain to Pharmacy Powerhouse

The 1980s brought a new chapter. The American healthcare system was becoming more complex, and the pharmacy was evolving into a vital part of it. CVS executives recognized this early. They began reimagining the company from a general store into a healthcare destination.

In 1985, CVS made a major move by acquiring Reese Drug Stores, expanding its footprint further into the Midwest. By 1990, CVS had more than 1,200 stores, and prescription drugs accounted for a growing portion of its revenue.

The leadership team, now guided by CEO Stanley Goldstein, knew that healthcare would be the company’s future. In 1996, Melville spun off CVS as an independent company. The newly named CVS Corporation began trading publicly, marking its official transformation into a standalone healthcare player.

Independence brought clarity of purpose. CVS no longer had to compete for Melville’s attention among shoe stores and department chains. It could focus entirely on becoming the go-to destination for prescriptions and everyday health.

Then came the first truly transformative acquisition: Revco in 1997 for $2.8 billion. Revco was a large regional pharmacy chain based in the Midwest and South, and the deal instantly expanded CVS’s national reach. Overnight, CVS doubled in size. By the end of the decade, it operated more than 4,000 stores.

But what made CVS special wasn’t just size it was how it began blending healthcare with retail convenience. In the early 2000s, the company started to experiment with in-store clinics. These became MinuteClinics, a bold concept: quick, affordable care for minor illnesses, staffed by nurse practitioners, located right where people already shopped.

Imagine catching a cold, walking into your local CVS, and seeing a nurse without an appointment that was revolutionary. It made healthcare local, accessible, and simple. The first MinuteClinic opened in 2000 in Minnesota, and CVS quickly scaled the model nationwide.

By 2006, CVS officially acquired MinuteClinic, making it a core part of its identity. This move blurred the line between pharmacy and clinic. CVS wasn’t just dispensing medicine anymore, it was delivering it directly to patients.

Segment 3: The Giant Moves PBMs, Insurance, and Redefining Healthcare

By the mid-2000s, CVS had become a dominant retail pharmacy chain. But the company’s leadership saw something bigger on the horizon: a chance to own the full healthcare experience, from the prescription pad to the insurance claim.

In 2007, CVS made a bold leap with the acquisition of Caremark Rx, a leading pharmacy benefit manager, or PBM, in a $26.5 billion deal. PBMs were the quiet power players of healthcare negotiating drug prices, managing formularies, and deciding which medications insurers would cover. By acquiring Caremark, CVS moved from being just a retailer to becoming a behind-the-scenes force in drug pricing and distribution.

The merger created CVS Caremark Corporation, signaling a new identity that fused retail pharmacy with benefits management. It allowed CVS to integrate vertically controlling more of the drug pipeline and serving both individual consumers and massive corporate clients.

Then came the biggest move yet. In 2018, CVS Health acquired Aetna, one of the largest health insurers in the United States, for $69 billion. It was one of the largest healthcare mergers in history.

The Aetna acquisition wasn’t just about scale; it was about strategy. With Aetna, CVS could now manage a patient’s entire healthcare journey from the doctor visit and insurance coverage to the prescription and follow-up care at a MinuteClinic. It created a closed ecosystem that few companies could match.

This move also redefined CVS’s identity. The company rebranded as CVS Health, signaling a mission that went beyond retail. It was no longer just a pharmacy chain; it was a full-fledged healthcare company that touched millions of lives every day.

By combining retail, pharmacy benefits, insurance, and primary care, CVS became one of the most vertically integrated healthcare companies in the world. The company could now coordinate care more efficiently, lower costs for patients, and offer convenience unmatched by hospitals or clinics.

Behind the scenes, this strategy was visionary. It anticipated a future where healthcare would be local, data-driven, and consumer-friendly a future where people might visit their corner CVS for everything from a flu shot to a chronic disease consultation.

Segment 4: Controversies, Challenges, and the Cost of Scale

Every healthcare giant carries a shadow and CVS Health is no exception. As the company grew from a neighborhood pharmacy into a national powerhouse, it faced growing scrutiny over its business practices, ethics, and the balance between profit and patient care.

One of the earliest controversies surrounded pharmacy benefit managers, or PBMs, a core part of CVS’s business through its CVS Caremark arm. Critics accused PBMs of a lack of transparency in how drug prices were negotiated, often leaving patients paying more than expected while companies profited from rebates and spread pricing. CVS argued that its PBM operations helped control costs for employers and insurers, but the debate over fairness in drug pricing became a national talking point, one that continues today.

Another flashpoint came from the very stores that built its empire. Pharmacists and technicians began voicing concerns about understaffing and increasing workloads, which they said made it difficult to ensure safe dispensing and proper counseling for patients. In recent years, pharmacists across the country even staged walkouts, calling for better working conditions and more realistic performance expectations. CVS publicly acknowledged these challenges, committing to improving staffing models and modernizing workflows, yet it remains a delicate balancing act between efficiency and care.

Then came the opioid crisis. Like many major pharmacies, CVS faced lawsuits alleging that it failed to prevent the over-dispensing of opioid medications. The company ultimately agreed to multi-billion-dollar settlements alongside competitors like Walgreens and Walmart, without admitting wrongdoing. It became a painful reminder of how deeply intertwined retail pharmacies are with the nation’s public health crises.

Even its boldest business moves, such as the acquisition of Aetna, stirred controversy. Critics questioned whether such consolidation would truly benefit consumers or simply create a corporate behemoth with too much control over healthcare delivery, insurance, and pricing. CVS argued that its vertical integration was designed to lower costs and improve care coordination, positioning itself as the future model of American healthcare.

In September 2025, CVS Health came under congressional investigation following allegations that it had used confidential patient data in a campaign opposing Louisiana legislation aimed at its pharmacy operations. The accusations raised serious questions about potential HIPAA violations and renewed scrutiny of the company’s data privacy practices.

This investigation comes at a pivotal moment for CVS Health, as the company accelerates its digital-first healthcare strategy and faces growing public and political concern over how patient information is handled in an increasingly connected system.

Going forward, mounting regulatory and privacy pressures could play a defining role in shaping CVS Health’s investment outlook and short-term risk profile.

Despite these challenges, CVS Health continues to evolve. It has leaned into digital transformation, primary care expansion, and community-based health services to regain public trust and redefine its purpose. The controversies haven’t stopped its momentum but they’ve forced the company to reckon with what kind of healthcare leader it wants to be: one driven by scale, or one driven by care.

Segment 5: People Who Made Their Mark Larry Merlo and Karen Lynch

Two leaders stand out in CVS Health’s transformation.

Larry Merlo, who served as CEO from 2011 to 2021, guided CVS through the Aetna merger and the company’s rebranding as CVS Health. He made the bold decision in 2014 to stop selling tobacco products in all CVS stores, despite losing billions in revenue. This move sent a powerful signal that CVS was committed to being a true healthcare company, not just a retailer.

Karen Lynch, who succeeded Merlo in 2021, became one of the most powerful women in corporate America. A former Aetna executive, Lynch has focused on deepening CVS’s healthcare footprint, especially in primary care and home health. Under her leadership, CVS has acquired Oak Street Health for $10.6 billion and Signify Health for $8 billion, expanding into direct patient care and home-based services.

Together, these leaders represent the evolution of CVS from a retail-focused company into a data-driven, integrated health platform.

Segment 6: Lessons from CVS Health

CVS Health’s story holds several lessons about vision and adaptability.

First, reinvention requires courage. CVS could have stayed a successful retail chain, but it repeatedly chose to evolve from selling beauty products to filling prescriptions to managing entire health systems.

Second, trust and brand equity matter. Millions of Americans already relied on CVS for everyday health needs. The company leveraged that familiarity to expand into more complex healthcare services. People already trusted CVS, and that trust became the foundation for its success in new areas.

Third, purpose can be profitable. When CVS removed tobacco, many saw it as a PR move. But in the long term, it solidified the company’s credibility as a healthcare provider. It also helped position CVS as a partner to insurers, employers, and governments seeking healthier populations.

Segment 7: What’s Next for CVS Health

The next chapter for CVS Health lies in integration and innovation.

The company is working to make healthcare more personalized, digital, and accessible. It is investing heavily in telehealth, home-based care, and data analytics to improve outcomes and reduce costs. CVS’s vast reach with over 9,000 retail locations gives it an unmatched advantage in accessibility. The goal is to make CVS the “front door” of healthcare, offering both physical and virtual care.

However, challenges remain. The healthcare system is still fragmented, and competition is fierce. Amazon, Walmart, and Walgreens are all entering the same space, blending retail and healthcare in new ways. To stay ahead, CVS will need to keep balancing convenience, cost, and quality while staying true to its healthcare mission.

But one thing is certain: the transformation of CVS Health shows that the future of healthcare may not belong to hospitals or traditional clinics. It may belong to companies that combine consumer trust, technology, and access and CVS Health is leading that charge.

By the time the episode was recorded, CVS Health stock stood at $81.66 a piece. CVS Health has over 9,000 retail locations across the United States, making it the largest pharmacy chain in the country. The company also operates more than 1,100 walk-in medical clinics, known as MinuteClinics, within or outside its stores. The company is said to have employed over 300,000 people at this point.

Outro

Thank you for tuning in to this episode of Petri Dish Perspectives: Biotech Unleashed.

CVS Health’s journey shows how a simple pharmacy can evolve into one of the most influential healthcare forces in the world. From filling prescriptions in a single store in Lowell, Massachusetts, to transforming how Americans access primary care, pharmacy benefits, and insurance — CVS’s story is one of continuous reinvention.

As healthcare becomes increasingly digital, CVS Health stands at the crossroads of technology, accessibility, and human touch. Whether through its MinuteClinics, the acquisition of Aetna, or its ongoing push into virtual care, the company continues to shape the way we think about integrated healthcare delivery.

If you enjoyed this episode, make sure to follow and share Petri Dish Perspectives with anyone curious about the future of biotech and healthcare innovation. You can also check out previous episodes on industry-defining companies like Vertex, Takeda, and Alnylam.

Until next time, this is your host, Manead, and see you next Thursday!

References

Manead Khin

Host