CVS.com will be the exclusive Internet provider for Merck-Medco's members. As part of the deal, Merck-Medco will acquire up to a 10 percent equity interest in ProCare, CVS's specialty pharmacy company, according to a company statement.
"This agreement is a major step forward for our e-commerce efforts and provides exclusive OTC access to all of Merck-Medco's more than 51 million members nationwide," said Tom Ryan, chairman and CEO of CVS.
Merck-Medco members ordering prescription drugs will have the choice of picking their order up at a CVS store or receiving it from a Merck-Medco mail service pharmacy.
ProCare focuses on supporting individuals requiring complex and expensive drug therapies. CVS and Merck-Medco will jointly market ProCare's specialty pharmacy products and services to Merck-Medco's clients.
CVS is the largest U.S. drugstore chain, with approximately 4,100 stores in the Northeast, Mid-Atlantic, Southeast and Midwest regions, and ranks only behind Walgreens in sales.
The agreement follows other online drugstore deals such as those between Rite Aid Corp. and Drugstore.com, and PlanetRx.com and Express Scripts Inc.
Merck-Medco is a subsidiary of Merck & Co. Inc. based in Whitehouse Station, N.J.
Shares of CVS rose 8 percent after the announcement.