CVS Agrees to Acquire Aetna for $69 Billion

December 4, 2017 Posted by
On Sunday, drugstore chain operator CVS Health Corp said it had agreed to acquire Aetna Inc for $69 billion, in what would be this year’s largest corporate acquisition.  CVS is one of the nation’s largest pharmacy benefits managers and pharmacy operators.   Aetna is one of its oldest health insurers, whose national business ranges from employer healthcare to government plans.  CVS is trying to tackle soaring healthcare spending through lower-cost medical services in pharmacies.

“When you walk into CVS there’s the pharmacy. What if there’s a vision and audiology center, and perhaps a nutritionist, and some sort of care manager?” CVS CEO Larry Merlo said.

CVS plans to use its low-cost clinics, called “MinuteClinic,” to provide medical services to Aetna’s roughly 23 million medical members. In addition to health clinics and medical equipment, CVS could provide assistance with vision, hearing, and nutrition.  A combined insurer and pharmacy benefit manager will also likely be better placed to negotiate lower drug prices.

The company expects to invest billions of dollars in the coming years to add clinics and services, largely financed by diverting funds away from other planned investments. That could eventually cut costs substantially, with the clinics serving as an alternative to more expensive hospital emergency room visits.

The deal comes as healthcare payers and pharmacies are responding to factors including the Affordable Care Act, rising drug prices and the threat of competition from online retailers such as Amazon.com Inc.
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