CVS Health Purchasing Aetna
CVS Health made a splash earlier this week with their announced purchase of Aetna. CVS Health is buying Aetna for $69 billion — a move made easier because CVS/caremark has provided PBM services to Aetna for the past ten years.
- The deal should close in late 2018, pending approval by regulators.
- Aetna will be a separate business unit under the CVS Health umbrella.
- Larry Merlo will remain as CEO of CVS Health.
- CVS Health’s revenue jumps to $221 billion, compared to United Healthcare’s $201 billion.
- CVS believes the merger provides an opportunity to turn their 10,000 pharmacies and clinics into community-based sites of care.
- Given the overlap between CVS stores/Minute Clinics and Aetna lives, people in FL, CA, OH, IL and VA may see the community-based sites of care first.
Impact on National CooperativeRx
For National CooperativeRx, it’s business as usual. We are holding finalist meetings for our new PBM contract (set to begin in 2019) and will take into consideration any impact this might have on our members. Our members’ best interest continues to be our main focus. The expansion of extremely large companies underscores the need our members have for the oversight and service our experts at National CooperativeRx provide.
The impact this purchase has on the market won’t be known until regulatory approval is given and final rollout is observed. Even then, final impact may not be known until the market gauges its success, and other companies consider similar cross-industry mergers and acquisitions.
This purchase solidifies CVS/caremark as the largest PBM. Additionally, it removes any risk of their largest block of business (Aetna) leaving, as when Anthem splits from Express Scripts. Anthem announced in October it will leave Express Scripts and instead partner with CVS/caremark for purchasing power beginning in 2020 as they build their own PBM. This will bring the CVS/caremark purchasing power to an all-time high.
The amount of purchasing power CVS/caremark passes along compared to other PBMs is the focus of our PBM RFP, along with customer service and overall member experience. With history as our evidence, we will continue to deliver best-in-class pricing. This is due to our not-for-profit business model, while our competitors need to factor in shareholder demands. In addition, our agility allows us to provide greater focus and more attention to managing an increasingly complicated and expensive portion of the health care dollar.
National CooperativeRx continues to evaluate changes in the market and make recommendations in our members’ best interests. If you have any questions, please don’t hesitate to reach out.