CVS, Medco get federal worker contract extensions

New York City Pharmacy benefits managers Medco Health Solutions Inc. and CVS Caremark Corp. said Monday they each received one-year contract extensions with drug benefit programs for federal employees.

CVS handles retail pharmacy benefit services for the Federal Employee Program, and Medco runs the mail service and specialty pharmacy programs. Each company had a three-year contract with the FEP that was extended until the end of 2011.

The two companies administer drug benefits and make money by cutting costs for plan sponsors and members.

CVS said the FEP covers about 4.9 million federal employees, retirees and family members.