WOONSOCKET, R.I. — CVS Caremark Corp. has received a two-year extension on its contract with the Teacher Retirement System of Texas (TRS) to provide pharmacy benefits for two years.

The contract, which begins on September 1, is worth slightly less than $1 billion to CVS Caremark: It is valued at $480 million in 2011 and $518 million in 2012.

A TRS spokeswoman says the pact allows for as many as four optional one-year renewals.

The timing of the contract renewal could not have been better for CVS Caremark, which in November revealed that its pharmacy benefit management business lost a net of $4.8 billion in contracts heading into this year.

Since that announcement CVS’ stock price has declined by more than 10% in New York Stock Exchange trading as investors began to question the wisdom of CVS Corp.’s 2007 acquisition of Caremark Rx Inc.

The TRS spokeswoman says the teachers group selected CVS Caremark as the pharmacy benefits manager from among five bidders, based on what was determined “to best serve TRS members.”

She notes that in a 2008 survey, 94.2% of the fund’s retired members said they were either satisfied or very satisfied with CVS services.

More than 202,000 retirees and their dependents participate in the TRS-Care plan or the group retiree health benefits program administered by TRS. While Aetna takes care of the medical benefits, CVS Caremark administers the pharmacy benefits.

Wells Fargo Securities analyst Matt Perry told the Reuters news agency that the contract is “good news” for CVS Caremark in the light of its recent loss of a significant number of PBM contracts.