Cvs Drugstore Chain Purchases Soma.Com

CVS, the country's largest drugstore chain, announced today it will purchase the Internet's first online drugstore, Seattle-based Soma.com, for $30 million in an effort to boost its online sales.

"It's a tremendous leap of technology and real world that totally works for the patient's interest," said Mitchell Reed, a spokesman for Soma.com. "Our marriage with CVS will allow us to take the insurance of most of the people in America."

The move is welcomed by Soma.com's competitors, who hope it will help legitimize the sale of medicine over the Internet.

"I think it's a good thing for all the players in the category. It helps establish the category as a major player in the drugstore business," said Debby Fry Wilson, spokeswoman for Redmond-based drugstore.com.

"I think it's very helpful because they will help to break down some of the barriers with the PBMs," she said, referring to pharmacy-benefits managers, who work with insurance providers to decide which drugs will be covered. A lack of recognition from these third parties has hampered the online drugstore industry.

"Once PBMs start to reimburse in this hybrid, they will have to reimburse across the board," Wilson said.

CVS President Tom Ryan stressed the move would help the company expand more than it could by launching a site of its own. Rhode Island-based CVS operates 4,100 stores in the Midwest and the Northeast, but none in the Seattle area.

"The acquisition of Soma.com and its outstanding organization will accelerate the execution of our Internet strategy by immediately giving us an expanded online presence," said Ryan. "It will also provide us with a platform to build upon, to reach new customers and expand CVS as a national pharmacy brand. This will give us a valuable head start and significant first-to-market advantages as the only major drugstore chain with a complete online pharmacy and front-store offering."

Soma.com's chief competitors are drugstore.com and South San Francisco-based PlanetRx.

Soma.com, which will remain in Seattle, was founded in January by Tom Pigott, who formerly worked for Nextel Communications and Caterpillar. He is the son of former Paccar Chairman Charles Pigott.