CVS Caremark Taking Stake in Generation Health

CHICAGO (Reuters) – CVS Caremark Corp (CVS.N) said on Tuesday it would start offering pharmacy benefit management clients more genetic services next year under a deal with Generation Health Inc, in which it is taking a minority stake.

The deal with privately held Generation Health will expand pharmacogenomic clinical and testing services.

Such services can help doctors evaluate a patient’s genetic make-up to determine if a medication will be effective and should help improve care for patients who do not respond to or have adverse reactions to their medication, CVS said.

CVS Caremark’s pharmacy benefits management business, or PBM, administers prescription drug benefits for employers and health plans and operates a large mail-order pharmacy.

Last week, CVS stunned investors when it said that its PBM had lost $4.8 billion in business heading into next year.

CVS Caremark already provides pharmacogenomic intervention services in its specialty pharmacy business. Now, under the new partnership, it plans to introduce those services for certain drugs dispensed under the traditional PBM.

The companies said they would first focus on clinical and testing programs that predict how a patient will respond to medications in areas such as oncology, cardiovascular medicine and the treatment of HIV.

The services are set to be introduced to CVS Caremark’s PBM clients in the second quarter of 2010.

As part of the deal, CVS Chief Medical Officer Dr. Troyen Brennan will join Generation Health’s board of directors.

Generation Health was created in November 2008 with funding from its founders and venture capital firm Highland Capital Partners. (Reporting by Jessica Wohl, editing by Maureen Bavdek)