BOSTON (Bloomberg) — CVS Corp., the second-biggest US drugstore chain, yesterday agreed to buy Caremark RX Inc. for $21.3 billion to create a combined service that manages drug-benefit plans and sales at pharmacies.Investors will receive 1.67 shares of CVS stock for each share of Caremark, the companies said. The transaction values Nashville, Tennessee-based Caremark at $48.76 a share, one percent less than its closing price yesterday. Caremark is hired by employers to keep costs down by seeking out drug manufacturers and pharmacies with the best prices.

The combination makes Woonsocket, Rhode Island-based CVS more competitive with Wal-Mart Stores Inc., which has announced it would expand discounting on generic drugs to 27 states. CVS also will be a larger rival to Medco Health Solutions Inc., the biggest manager of employee drug plans.

“It makes CVS both a competitor and a supplier to the other chain drugstores,” said Matthew Kaufler, who helps manage $2.5 billion, including CVS shares at Clover Capital Management in Rochester, New York. “This could truly be a transformative event.”

Health insurance plans and employers who buy drugs are turning to the companies to help counter rising health-care costs. Spending on prescription drugs in the US increased 5.4 percent to $251.8 billion in 2005.

Wal-Mart, responding in part to the national debate over the affordability of medicine, said in September it would sell a month’s supply of more than 300 types of generic drugs for as little as $4.

Caremark and its competitors have been taking advantage of a flood of generic copies of brand-name drugs, such as Merck & Co.’s Zocor. Pharmacy-benefit managers can switch most of their mail-order customers from high-priced brands to low-cost generics in a matter of days or weeks.

Shares of Caremark fell 69 cents to $48.54 at 2:24 p.m. in New York Stock Exchange composite trading. CVS dropped $2.30, or 6.5 percent, to $29.35.

Caremark and its competitors lower costs for health plans and employers by buying in bulk, minimizing waste in the handling of expensive biotechnology drugs and promoting generics.

Drug-benefit managers have been merging in recent years, with Caremark taking over Advance PCS for $6.1 billion in 2004.

Medco Health Solutions Inc., the biggest manager of employee prescription drug benefits by sales, bought specialty pharmacy provider Accredo Health Inc. last year, while Express Scripts, the third biggest, acquired CuraScript Pharmacy Inc. in 2004 and Priority Healthcare Inc. last year.

Medco, a former Merck unit, and Express Scripts themselves are possible takeover targets, said Kemp Dolliver, an analyst at Cowen & Co. in Boston. Medco rose 78 cents, or 1.5 percent, to $54.28. Express Scripts increased $1.92, or 3 percent, to $65.64.

Medco and Express Scripts may also be looking to buy Caremark, and might be more likely to do so successfully, said Robert Willoughby, a Bank of America Securities Inc. analyst in New York.

“The PBM model that had consistently grown has been the independent model,” he said yesterday in a note to clients. “CVS Corp. may just be there for a look under the hood.”

In August, Caremark said second-quarter net income jumped 20 percent to $255.1 million, or 58 cents a share, from $212.8 million, or 47 cents, a year earlier. Caremark and CVS are scheduled to announce third-quarter results tomorrow. Caremark’s revenue rose 28 percent to $33 billion last year.

The companies generate their highest profit margins by selling generics through the mail. Medco told investors March 1 that this year’s patent expirations, including Zocor, would help lift 2006 earnings by as much as 11 cents a share.

CVS has added walk-in medical treatment and other services to build revenue, spending $5 billion on acquisitions since 2004. CVS is second only to Walgreen Co. in US retail drug sales.