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CVS Caremark (CVS - Analyst Report) recently launched a new Pharmacy Advisor program to help treat chronic cardiovascular illness.

The Pharmacy Advisor for chronic cardiovascular care will primarily focus on medication adherence for persistent illnesses such as high blood pressure, high cholesterol, coronary artery disease (CAD) and congestive heart failure (CHF). It has been noted that high blood pressure single-handedly affects one out of three adults, with the health care system costing roughly $76 billion annually.

This program is based on the research done by the company along with Harvard University, Brigham and Women's Hospital. The research, published in a healthcare journal in January, found that proper medication adherence can save nearly $4,000 hypertension patients, $1,200 high cholesterol patients and $8,000 CHF patients annually.

We are encouraged by the improved performance of CVS Caremark’ Pharmacy Services segment for the third consecutive quarter, which had earlier been a drag on the company’s performance. This segment posted a robust 25.8% increase in revenues to $14.8 billion during the third quarter of fiscal 2011.

The significant growth was primarily on the back of the long-term contract with Aetna (AET - Analyst Report) as well as the acquisition of the Medicare Part D business of Universal American Corp. (UAM - Snapshot Report).

We are also impressed by CVS Caremark’ several recent contract wins over Medco in the recent past, which include Federal Employee Program (FEP) contract in May 2011, as well as the biggest US public pension fund Calpers.

We remain optimistic regarding CVS Caremark’s longer-term potential based on its retail execution, deployment potential and strong 2012 generics cycle. However, the proposed merger between Express Script (ESRX - Analyst Report) and Medco will intensify competition in the Pharmacy Services segment.

CVS Caremark currently retains a short-term Zacks #2 Rank (Buy). However, over the longer term, we remain Neutral on the stock.

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