 1 Filed by Caremark Rx, Inc. Pursuant to Rule 425 under the Securities Act of 1933 and Deemed Filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Caremark Rx, Inc. Commission File No.: 001-14200 |
 2 Mac Crawford Chairman, President and CEO JP Morgan 25 Annual Healthcare Conference January 10, 2007 Creating the Premier Pharmaceutical Services and Integrated Healthcare Provider th |
 3 Cautionary Statement Regarding Forward-Looking Statements This document contains certain forward-looking statements about Caremark and
CVS. When used in this document, the words “anticipates”,
“may”, “can”, “believes”, “expects”, “projects”, “intends”, “likely”, “will”, “to be” and any similar expressions and any other statements that are not historical facts, in
each case as they relate to Caremark, CVS or the combined company or the
transaction, are intended to identify those assertions as
forward-looking statements. Such statements include, but are not limited to, statements about the benefits of the merger, information about the combined company, including expected
synergies and projected revenues and cash flows, combined operating and
financial data, including future financial and operating results, the
combined company’s objectives, plans and expectations, the likelihood of satisfaction of certain closing conditions and whether and when the merger will be consummated.
These statements are based upon the current beliefs and expectations of management of Caremark and CVS and are subject to a number of factors that could cause actual outcomes and results to be materially
different from those projected or anticipated. These
forward-looking statements are subject to numerous risks and uncertainties. The following factors, among other things, could cause actual results to differ from the
forward-looking statements in this document: (1) the companies may be
unable to obtain stockholder or regulatory approvals in a timely manner, if
at all; (2) the businesses of Caremark and CVS may not be integrated successfully or as quickly as expected; (3) cost savings and any other synergies or cash flows from the merger may not be fully realized or may take longer to realize than expected; (4) the transaction may involve unexpected
costs; (5) the businesses and results of operations of Caremark and CVS may
suffer as a result of uncertainty surrounding the transaction; and (6) the
industry may be subject to future regulatory or legislative action. Other unknown or unpredictable factors also could have material adverse effects on future results,
performance or achievements of the two companies. In light of these
risks, uncertainties, assumptions and factors, the forward-looking
events discussed in this document may not occur. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date stated, or if no date is stated, as of the date of this press release. Risk factors affecting the businesses of each
of Caremark and CVS are set forth in, and may be accessed through, each
company’s filings with the SEC. These and other factors relating to the merger are available in the joint proxy statement/prospectus filed with the
SEC. This presentation may include certain non-GAAP financial measures
as defined under SEC rules. A reconciliation to the most directly comparable GAAP measures can be found in the footnotes to the tables attached to Caremark’s latest quarterly earnings press release and certain
supplemental information is provided on caremarkrx.com (applicable slides
are footnoted). |
 4 Important Information for Investors and Stockholders Caremark and CVS filed a joint proxy statement/prospectus with the SEC in connection
with the proposed merger. Caremark and CVS urge investors and
stockholders to read the joint proxy statement/prospectus and any other
relevant documents filed by either party with the SEC because they contain
important information. Investors and stockholders are currently able to
obtain the joint proxy statement/prospectus and other documents filed with
the SEC free of charge at the website maintained by the SEC at www.sec.gov. In addition, documents filed with the SEC by Caremark will be available free of charge
on the investor relations portion of the Caremark website at
www.caremark.com. Documents filed with the SEC by CVS will be
available free of charge on the investor relations portion of the CVS website at http://investor.cvs.com. Investors and stockholders may obtain a detailed list of
names, affiliations and interests of participants in the solicitation of
proxies of Caremark stockholders to approve the merger at the following address: Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022. Caremark, and certain of its directors and executive officers may be deemed to be
participants in the solicitation of proxies from its stockholders in connection with the merger. A description of the interests of Caremark’s directors and executive officers in Caremark is set forth
in the proxy statement for Caremark’s 2006 annual meeting of
stockholders, which was filed with the SEC on April 7, 2006. CVS, and
certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of CVS in connection with the
merger. A description of the interests of CVS’s directors and executive officers in CVS is set forth in the proxy statement for
CVS’s 2006 annual meeting of stockholders, which was filed with the SEC on March 24,
2006. If and to the extent that any of the Caremark or CVS
participants will receive any additional benefits in connection with the
merger that are unknown as of the date of this filing, the details of those benefits are described in the definitive joint proxy statement/prospectus relating to the merger. Investors and stockholders can obtain more detailed information regarding the direct and indirect
interests of Caremark’s and CVS’s directors and executive officers in the merger by reading the definitive joint
proxy statement/prospectus. |
 5 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers No strategic benefits Financial benefits are illusory Risk of antitrust delay likely Significant business risk Diminished financial flexibility Integration track record questionable |
 6 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS/Caremark merger Strategic Rationale |
 7 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers Lost business & negative synergies could offset purported synergies Synergy calculation questionable Financial Risk Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS/Caremark merger Strategic Rationale |
 8 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers Delay will destroy 2007 and perhaps 2008 selling season Enforcement agencies could impose adverse conditions Antitrust Risk Lost business & negative synergies could offset purported synergies Synergy calculation questionable Financial Risk Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS/Caremark merger Strategic Rationale |
 9 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers Clients overwhelmingly negative Risk of substantial client attrition Business Risk Delay will destroy 2007 and perhaps 2008 selling season Enforcement agencies could impose adverse conditions Antitrust Risk Lost business & negative synergies could offset purported synergies Synergy calculation questionable Financial Risk Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS/Caremark merger Strategic Rationale |
 10 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers Limited capital for investment in existing business, strategic opportunities, dividends and share repurchases ESRX recently placed on negative watch by rating agencies Financial Position Clients overwhelmingly negative Risk of substantial client attrition Business Risk Delay will destroy 2007 and perhaps 2008 selling season Enforcement agencies could impose adverse conditions Antitrust Risk Lost business & negative synergies could offset purported synergies Synergy calculation questionable Financial Risk Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS/Caremark merger Strategic Rationale |
 11 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers No experience with large-scale merger integration Recent integration track-record questionable Management Team Limited capital for investment in existing business, strategic opportunities, dividends and share repurchases ESRX recently placed on negative watch by rating agencies Financial Position Clients overwhelmingly negative Risk of substantial client attrition Business Risk Delay will destroy 2007 and perhaps 2008 selling season Enforcement agencies could impose adverse conditions Antitrust Risk Lost business & negative synergies could offset purported synergies Synergy calculation questionable Financial Risk Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS/Caremark merger Strategic Rationale |
 12 Express Scripts Proposal Not in Best Interests of Shareholders, Customers and Consumers No experience with large-scale merger integration Recent integration track-record questionable Management Team Limited capital for investment in existing business, strategic opportunities, dividends and share repurchases ESRX recently placed on negative watch by rating agencies Financial Position Clients overwhelmingly negative Risk of substantial client attrition Business Risk Delay will damage 2007 and perhaps 2008 selling season Enforcement agencies could impose adverse conditions Antitrust Risk Lost business & negative synergies could offset purported synergies Synergy calculation questionable Financial Risk Does not create competitive advantages Defensive reaction out of concern about enhanced competition Constructed to disrupt CVS merger Strategic Rationale |
 13 Value • Significant strategic benefit • Solid financial benefits • Clients supportive • Q1 Close • Strong management team • No strategic advantage • Financial benefits suspect • Client attrition • Q3 close or later • Questionable recent performance & integrations |
 14 CVS/Caremark Merger Capitalizes on Evolving Industry Trends In store enrollment and consultation; Medication Therapy Management Medicare Part D More transparency at point of sale - consumer able to make totally informed decisions Cost Shift to Consumer Retail locations; In store enrollment and consultation Specialty Products Chance to drive higher substitution rates at point of sale Robust Generic Pipeline Consultation by pharmacist or clinician with participant = favorable outcomes Focus on Wellness Gives consumers timely, actionable, personalized information to improve health outcomes Growing Consumerism CVS Merger Benefit Market Trends |
 15 CVS/Caremark Merger is in Best Interest of Shareholders, Customers and Consumers Significant strategic benefits Financial benefits are concrete and conservative No antitrust risk Business disruption minimal Enhanced financial position Proven management teams CVS/Caremark Merger Enhances Shareholder Value |
 16 CVS/Caremark Merger Enhances Shareholder Value Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 17 CVS/Caremark Merger Enhances Shareholder Value At least $500 million in validated cost synergies with additional cost and revenue synergy opportunities Financial Benefits Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 18 CVS/Caremark Merger Enhances Shareholder Value HSR period expired 12/20/06 – no risk Antitrust Status At least $500 million in validated cost synergies with additional cost and revenue synergy opportunities Financial Benefits Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 19 CVS/Caremark Merger Enhances Shareholder Value Clients overwhelmingly positive Could enhance selling season results Minimal integration risk Business Opportunity HSR period expired 12/20/06 – no risk Antitrust Status At least $500 million in validated cost synergies with additional cost and revenue synergy opportunities Financial Benefits Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 20 CVS/Caremark Merger Enhances Shareholder Value Flexibility for investments in existing business, strategic opportunities, dividends and share repurchases Financial Flexibility Clients overwhelmingly positive Could enhance selling season results Minimal integration risk Business Opportunity HSR period expired 12/20/06 – no risk Antitrust Status At least $500 million in validated cost synergies with additional cost and revenue synergy opportunities Financial Benefits Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 21 CVS/Caremark Merger Enhances Shareholder Value Flexibility for investments in existing business, strategic opportunities, dividends and share repurchases Financial Flexibility Proven track-records with large scale acquisition integration History of exceeding stated synergies Visionary leadership Management Teams Clients overwhelmingly positive Could enhance selling season results Minimal integration risk Business Opportunity HSR period expired 12/20/06 – no risk Antitrust Status At least $500 million in validated cost synergies with additional cost and revenue synergy opportunities Financial Benefits Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 22 CVS/Caremark Merger Enhances Shareholder Value Flexibility for investments in existing business, strategic opportunities, dividends and share repurchases Financial Flexibility Proven track-records with large scale acquisition integration History of exceeding stated synergies Visionary leadership Management Teams Clients overwhelmingly positive Minimal integration risk Expect Q1 close before selling season Business Opportunity HSR period expired 12/20/06 – no risk Antitrust Status At least $500 million in validated cost synergies with additional cost and revenue synergy opportunities Financial Benefits Logical evolution to better serve customers Caremark will be an even more effective PBM Will create differentiated services Strategic Benefits |
 23 CVS/Caremark Merger Enhances Shareholder Value Our Board gave careful consideration to the Express Scripts proposal. In the end, our conclusion was simple and straightforward: Express’ proposal is not in the best interests of Caremark, its shareholders, customers and consumers. Caremark believes that future success does not lie in simply creating a larger PBM, but in becoming an end- to-end provider of diversified pharmaceutical services and integrated healthcare solutions, thereby enhancing Caremark’s already strong clinical outcomes and creating unique opportunities to improve consumers’ health, control costs and meet the needs of payors. |
 24 Mac Crawford Chairman, President and CEO JP Morgan 25 Annual Healthcare Conference January 10, 2007 Creating the Premier Pharmaceutical Services and Integrated Healthcare Provider th |