A CVS Caremark Corp. (CVS) program allowing customers to pick up 90-day maintenance prescriptions at stores rather than just through the mail exemplifies the advantages that had been expected from the 2007 merger of the drugstore and the pharmacy-benefits company.

However, industry watchers seem split on the program's possible bottom-line impact, with one saying it could boost per-share earnings this year as much as 8%, while others say it may take another year or two to produce profits. The difference stems from the question of how quickly clients - both existing and new - will join the plan. According to one estimate, less than 5% of the company's current customers are enrolled.

Maintenance Choice, which CVS began testing last year, allows customers to pick up 90-day prescriptions for chronic diseases at the company's nearly 7,000 retail locations for the same price they pay for mail-order prescriptions.

Mail order generally offers better margins to drugstores and is considered more customer friendly because it's cheaper. CVS, however, says it can dispense these prescriptions more profitably at the retail level.

Due to so-far unsatisfying returns on the pharmacy-benefits side of the business, investors have been skeptical about the merged company, valuing CVS stock at a discount in terms of its price-earnings ratio compared with drugstore competitors and other pharmacy-benefits managers. Last month, however, CVS said Maintenance Choice boosted its retail pharmacy sales by 1.2 percentage points.

"We expect the market to take a 'show me' attitude until bottom-line results return," Morgan Stanley analyst Mark Wiltamuth said.

While CVS shares have lost about 27% of their value in the last 52 weeks, they've added about 9% since the beginning of the year. That's better than the S&P 500 Index, which has lost almost a third of its value in the last 52 weeks, and is up about 5% so far this year.

CVS said about 45% of those members enrolled in Maintenance Choice have switched to the retail option so far.

Adam Fein, president of Pembroke Consulting Inc. and author of a blog called Drug Channels, says he doesn't doubt that Maintenance Choice is profitable overall for CVS, but he is waiting for the company to explain how the move from mail to retail for the prescriptions alone boosts profitability.

He says the total operating expenses for moving a script to a retail store for dispensing should be generally higher than dispensing from a mail warehouse.

"There still seems to be an open question: Is CVS Caremark sacrificing profitability of mail prescriptions by moving them to a retail setting?" Fein said. "Is there a loss of profitability moving the prescription from one place to the other?"

Despite the questions, some analysts are making ambitious predictions about Maintenance Choice's contribution to CVS' bottom line, based primarily on market-share gains as the program continues to roll out.

Among the most bullish is Jefferies analyst Scott Mushkin, who estimates that the program could boost 2009 earnings per share as much as 20 cents. He thinks earnings will benefit most in the second half of 2009 and even more in 2010, as the Maintenance Choice population expands to include existing participants not in mandatory mail programs and altogether new members, which "deliver the most profitability to the system."

Bernstein analyst Helene Wolk sees Maintenance Choice boosting CVS' bottom line by about 20 cents in 2010, mostly from share gains. She says there will be minimal impact to CVS' financial results this year because the program is still in early stages and so far most of its experience has been with existing clients.

As of July 1, 2.8 million participants, or less than 5% of CVS' total customers, will be enrolled in Maintenance Choice, Wolk said.

Morgan Stanley's Wiltamuth said he expects that if Maintenance Choice makes the impact some predict, it will be no earlier than 2010, and more likely in 2011.

"We are very much in the first inning in the adoption" of Maintenance Choice, Wiltamuth said. "It's about uptake right now, not profitability."

-By Kelly Nolan, Dow Jones Newswires; 201-938-4049; kelly.nolan@dowjones.com