Caremark Rx was founded in 1993 in Birmingham, Alabama as MedPartners Inc. by HealthSouth Corporation along with Richard Scrushy (former CEO of HealthSouth) and one time HealthSouth Chief Operation Officer Larry House as a physician practice management (PPM) company.

After going public in 1995, MedPartners quickly became the largest PPM company through many aquisitions. In 1996, Caremark International was acquired by MedPartners with MedPartners endeding up with Caremark's PPM division and prescription benefit management (PBM) and disposing of Caremark's rehabilitaion hospitals to HealthSouth. Caremark International was founded as a unit of Baxter International. It expanded to the distribution of drugs for other conditions, including human growth hormone and multiple sclerosis. The company was spun off from Baxter International in 1992. In 1998, after a failed merger attempt with PhyCor, MedPartners announced that it would suffer a net loss of 800 million dollars. Chairman, President and CEO Larry House resigned with Richard Scrushy acting as interm Chairman, President and CEO. In 1999 Edwin "Mac" Crawford became Chairman, President and CEO. After taking over Mac Crawford announced that MedPartners was exiting its PPM business and refocusing on its PBM business. MedPartners changed its name to Caremark Rx in 2000, after it had sold all of its PPM practices. In 2001 Richard Scrushy sold his remaining shares in Caremark and left its board to continue as Chairman and CEO of HealthSouth. The reason behind the PhyCor merger being terminated was due to MedPartner's false accounting practices.

In 2003, Caremark announced it was moving its corporate headquarters from Birmingham, Alabama to Nashville, Tennessee. Many believe the reason behind the relocation was so the company could hide its HealthSouth past. The announcement came only several months after the HealthSouth scandal and was viewed negatively by the Birmingham community after the city had stuck behind Caremark through its own scandal.

Caremark currently has approximately 11,000 employees.

It is the largest prescription management and pharmaceutical services business in the United States and is a member of the Fortune 100.

In 2004 it merged with AdvancePCS although many employees of the legacy Caremark organization often wonder "who bought who" as much of the AdvancePCS senior leadership replaced the legacy Caremark leadership resulting in adopting the "Arizona" and "Texas" way of doing things. The 3270 system also was implemented firmwide replacing systems developed later.