CVS Buying Aetna Insurance For $14 Billion


CVS Buying Aetna Insurance For $14 Billion

Instead, the deal would be a way for CVS and Aetna to make healthcare delivery more efficient, according to Hill.

But if the CVS-Aetna merger creates a domino effect of health care companies buying each other, which some analysts consider likely, the impact on consumers could be both more wide-ranging and harder to predict in advance.

US drugstore chain operator CVS Health said on Sunday it had agreed to acquire USA health insurer Aetna for $69 billion, seeking to tackle soaring healthcare spending through lower-cost medical services in pharmacies.

CVS CEO Larry Merlo said during a conference call with analysts Monday that the combined resources of CVS and Aetna could make the pharmacies and walk-in clinics kind of like the medical version of the Genius Bar at Apple Stores, with experts dispensing quick, convenient and reliable health care knowledge. A merged CVS-Aetna "can meet an unmet need in terms of improving access and reducing cost and helping people achieve their best health".

The company explained this with an example of how diabetics could get quicker, easier treatment.

He says the obvious motivation behind the merger is that CVS and Aetna can save money on prescription drugs by simplifying the complicated way medications are paid for, and eliminating one middlemen looking to make a profit.

"These types of interventions are things that the traditional health care system could be doing, but the traditional health care system lacks the key elements of convenience and coordination that help to engage consumers in their health", Merlo said in the release.

"A company like CVS has 10,000 brick and mortar locations", said Zack Cooper of Yale School of Public Health.

But it's not entirely clear if or how quickly savings would get passed down to consumers.

CVS also recently took over the pharmacy operations at Target.

His company provides benefits services for businesses. Bertolini will be on the combined company's board but won't be in charge of Aetna unit.

CVS's shift from a drugstore chain to health care provider is years in the making, Boston College health economist Sam Richardson pointed out, foreshadowed in the company's earlier purchases of Caremark and Omnicare, and its 2014 decision to stop selling tobacco products.

"I think over time you're going to see less of that front-store retail and more health care services in their stores", said Jeff Jonas, a portfolio manager for Gabelli Funds who follows drugstores.

Meanwhile, deeper collaboration between Aetna's insurance business and CVS's PBM division could drive down drug costs by adding clients and boosting the PBM's leverage with drugmakers. The latter two were deals in which one major health insurer sought to buy another.

The deal is still pending regulatory approval, which is less than certain in the face of comments about the AT&T-Time Warner deal from President Trump and the Department of Justice. Gradually, CVS added services like blood draws or monitoring of chronic conditions such as high blood pressure and diabetes.

There is also rampant speculation about what plans Amazon has for the drug business after it received wholesale pharmacy licenses in a dozen states in October.