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CVS eyes Net pharmacy plan

Facing growing competition from fledgling online pharmacies, drugstore chain CVS says it plans to also jump on the Net.

Facing growing competition from fledgling online pharmacies, brick-and-mortar chain drugstore chain CVS said it plans to also jump on the Net to fill orders for prescription drugs by the fourth quarter.

With its planned foray on to the Web, CVS joins a growing list of brick-and-mortar pharmacies that have already announced their Web intentions, including Walgreens and Rite-Aid.

Internet-only based pharmacies have launched to strong, and sometimes debilitating, consumer traffic to their sites. These sites-- including Drugstore.com, PlanetRX, and Soma.com-- allow users to fill prescriptions 24 hours a day. They also give users information to comparison-shop between generic and brand name products.

Strong brand recognition in the physical world has not always translated to recognition on the Net. Jumping on the Internet bandwagon early is considered vital.

The prize: a piece of the $230 billion total market for prescription drugs, personal and beauty products, and vitamins.

"Right now, online pharmacies have a very small piece of that market compared to brick-and-mortar stores," said CVS spokesman Todd Andrews. "But even a casual observer knows that Internet sites will grab an increasingly larger share."

CVS plans to expand its existing Web site, which at this time provides only corporate and investor information, to allow consumers to place orders over the Internet. The site will also offer medical and health-care information, and will also allow users to maintain a personalized health page.

"We are committed to becoming the leading drugstore chain offering on the Internet," CVS chief executive Thomas Ryan said earlier this week during the company's financial earnings call. "The Internet is a logical extension of our business."

During the call, Ryan added that CVS will explore other options to its Web strategy, including acquisitions.

CVS spokesman Andrews said the company had not discussed any plans to spin off the online venture.

Andrews added that the company will launch a massive television, radio, print, and Internet advertising campaign to market its Net services later this year. The company also plans to take a decidedly low-tech marketing route by printing CVS bags that alert users of their Web services.

Earlier this year, CVS hired a Protcter & Gamble vice president, Lawrence Zigerelli, to become vice president of corporate development. His duties include helping to head CVS's electronic commerce business.