Walgreens and CVS are the leading drug store-pharmacies to begin adding medical clinics to their stores. Many people find them convenient and helpful. Today, there are at least 9,600 CVS locations in the United States and their clinics have become extremely popular.
In a move that caught many in the health industry off guard, CVS announced they buying the healthcare insurance giant Aetna for a whopping sum of $67.5 billion and stocks. The purchase has to be approved by the feds, but most predictions say the deal should go through without many issues.
The big question now is how will this impact not only their stores and clinics, but the healthcare industry in general?
(Bloomberg-Gadfly) – The idea of the place that sells you toothpaste also managing your health insurance may feel odd. But that’s set to be a new reality after CVS Health Corp.’s announcement on Sunday that it will acquire Aetna Inc. for about $67.5 billion in cash and stock.
In order to justify the hefty cost of this deal, CVS and Aetna need to embrace that oddness and become a far more prominent player in the health-care market.
Part of the motivation for the deal is prosaic. Aetna’s key Medicare Advantage market is growing more competitive, but the company has limited options to make a big deal in that space; the government has not been friendly to insurer mega-mergers.
CVS, similarly, has few options to bulk up further in the already concentrated retail pharmacy and pharmacy benefit management (PBM) sectors. Meanwhile, Amazon.com Inc. is contributing to a tough environment for retail sales, amid rumors it might also get into the pharmacy business. Even without Amazon, CVS’s PBM arm faces lower-cost competitors and government scrutiny…
It is thought that the purchase of Aetna will allow Aetna to negotiate cheaper drug prices which would be an advantage for CVS customers, especially those with Aetna insurance. It could also benefit and help expand their in-store health clinics while at the same time lead more people to seek Aetna policies, which could be a win-win-win for CVS, Aetna and consumers.