July 29--Aetna and CVS Caremark have entered into a 12-year contract to administer the Hartford health insurer's pharmacy drug program.

The deal will mean lower-prices for Aetna's corporate customers, which could then lower the cost of coverage.

Aetna retains its large mail-order service, spokesman Fred Laberge said Wednesday.

The benefit for Aetna is CVS Caremark's purchasing power as the largest procurer of prescription drugs in the world. Woonsocket, R.I.-based CVS Caremark will be buying from pharmaceutical companies on behalf of 50 million people in its own pharmacy-benefit program plus the added 9.7 million in Aetna's Pharmacy Benefit Management program.

Aetna spends about $9.5 billion annually on its pharmaceutical coverage, which is offered separately from the health insurance program that serves 18.6 million nationwide.

CVS Caremark says Aetna customers will still be able to buy pharmaceuticals from competing drugstores, such as a local pharmacist-owned store, a Walgreens or a Rite Aid.

"We will add CVS Caremark's best-in-class clinical capabilities and broad market reach, enabling us to deliver better drug discounts and improved pricing and service to our customers," said Aetna Chairman and CEO Ronald A. Williams.

The arrangement will mean 800 Aetna employees will be transferred over time to CVS Caremark while the health insurer retains about 1,000 employees in its Pharmacy Benefit Management program. In Connecticut, there will be no job losses, but about 20 pharmacy network employees based in Hartford will be transferred to CVS beginning in January, Laberge said. The transfers will be Aetna employees in Kansas City, Pompano Beach, Fla., and a couple of other locations, Laberge said.

The companies also will share clinical offerings, such as call centers and tracking patients' medical needs for better preventive care.

The agreement was announced Tuesday night, immediately before Aetna reported an increase in second-quarter earnings of 42 percent compared with the same quarter last year. Some of the services have to be submitted to state insurance regulators. The companies expect to start the arrangement on Jan. 1, 2011.

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