Woonsocket-based CVS/Caremark Corp. said yesterday that it won a three-year contract renewal to provide retail pharmacy benefits to the health plan for 4.7 million federal employees and retirees, while losing the mail-order portion to Medco Health Solutions Inc.

The Caremark Pharmacy Services division agreement covers the prescriptions that patients fill at drugstores and will generate about $4 billion a year in revenue, the company said in a statement.

Caremark lost the contract to administer mail-order prescriptions, which it has done since 1993, to rival Medco, the largest U.S. manager of drug benefits for employee health plans.

Medco won a three-year contract for mail-order, as well as for specialty medicines, it said in a separate statement yesterday. The agreements are with the Blue Cross and Blue Shield Association’s Government-wide Service Benefit Plan, also known as the Federal Employee Program.

Caremark has been administering FEP’s retail pharmacy benefit management program since 1993. Under terms of the new agreement, the Caremark division will continue to provide retail pharmacy benefit management services through 2010, including network contracting and management of a comprehensive suite of highly customized clinical programs. Caremark’s previous award of the mail service program for FEP was effective Jan. 1, 2005, and continues through year end 2007.

Tom Ryan, president and chief executive officer of CVS, stated, “We are pleased that FEP has chosen to continue its relationship with Caremark. FEP is a highly valued client and we are committed to continuing to deliver on the high-service levels and patient satisfaction scores that we have provided to FEP’s federal employees, retirees and their families over the years. While we are disappointed in the decision to outsource the mail fulfillment to a third party beginning in 2008, we are happy to continue as the pharmacy-benefit manager providing coordination of all clinical aspects of the program.”