CVS to Buy Aetna
Last Sunday, CVS Health announced that they will buy Aetna in a deal valued at $77 billion, including debt. The press release noted that “the transaction fills an unmet need in the current health care system and presents a unique opportunity to redefine access to high-quality care in lower coast, local settings whether in the community, at home or through digital tools.”
Larry J. Merol, Chief Executive Officer and President of CVS Health said that the merger is expected to “remake the consumer health care experience.” Both companies noted that their mutual work in developing consumer-centered health care platforms will make the merger important to consumers who are seeking better and less expensive options for their health insurance needs.
Currently, CVS has approximately 9,700 pharmacy locations, as well as 1,100 walk-in MinuteClinic locations, which will be connected with Aetna’s large footprint of network providers to offer better consumer access to healthcare.
According to Aetna’s chairman and CEO, Mark T. Bertolini, this will be especially true for the more than 30 million patients suffering from diabetes, which cost the health industry more than $245 billion each year.
Patients with diabetes will receive care in between doctor visits through face-to-face counseling at store-based health hub and remote monitoring of key indicators such as blood glucose levels. When needed, patients can receive text messages to let them know when their glucose levels deviate from normal ranges. As a follow up, patients can receive counseling on medication adherence, pick up diabetes-related supplies and engage ancillary services such as counsel on weight loss and programs designed to reverse diabetes through nutrition.
The CVS/Aetna merger must first be approved by the United States Department of Justice, as well as by the shareholders of each company. If approved, the merger will most likely go through by the third quarter of 2018. Consumer groups are concerned that despite the hype over better access to healthcare, patients will have fewer options, which will ultimately drive up costs.
In 2016, Target reported that their 1,660 pharmacy locations would be sold to CVS in a $1.9 billion acquisition. This announcement was followed by the $9.4 billion Walgreens and Rite-Aid Pharmacy merger deal. As of October, Amazon has received approval in more than 12 states for wholesale pharmacy licenses, and their purchase of brick and mortar Whole Foods stores has many wondering if the online giant will also open in-store pharmacies in those locations.