Pharmaceutical giant CVS Health has agreed to buy Aetna in a $ 69 billion acquisition that could curb healthcare costs and transform its 9,700 pharmacy windows into community medical centers for primary care and basic procedures, familiar people said on Sunday. with the agreement. .
The pharmacy chain agreed to buy Aetna for around $ 207 per share, or $ 69 billion.
If approved by regulators, the mega merger would create a giant health care company, allowing CVS to provide a wide range of health services. services to Aetna's 22 million medical members in its national network of pharmacies and clinics without an appointment, and further reduce the dependence of the pharmacy titan on retail sales that have faced increasing competition.
And the agreement is likely to highlight even more mergers in the health care industry, which has been consolidating and facing new potential competition from Amazon.
"I think it will create more consolidation among insurers and retailers, blurring the lines," said Ana Gupte, an badyst at Leerink Partners, who recently pointed to retail giants Walgreens Boots Alliance or Walmart as potential "buyers of dark horses" from the health insurer Humana.
Wall Street badysts have said the agreement could reduce health spending, if, for example, CVS can pressure clients to use walk-in clinics instead of an emergency room for minor problems. But consumer advocates argue that the agreement would limit consumer choice and could further hinder the entry of new companies into a market increasingly dominated by giant companies.
Even before the announcement, the well-known pharmacy chain has been a dominant player in the big business of negotiating drug prices for insurers and employees. The merger would give CVS an even broader role in the management of medical care.
The combined company could take mbadive amounts of Aetna medical claims data and the large number of CVS contact points for consumers, including its 9,700 retail stores and 1,100. MinuteClinics.
CVS could turn these locations into a kind of community health center, where pharmacists and nurses provide follow-up and monitoring to patients recently discharged from the hospital, and thus help a null re-entry (Hospital readmissions are a increasing cost in medical care)
Stores could also transform preventive care, offering wellness, nutrition and even imaging services, saving costs by keeping people healthier and providing care in a lower cost environment than a hospital .
Pharmacists and nurses could help ensure that patients with chronic illnesses stay on their medications, which would keep those conditions easier to manage than when they get out of control.
"All insurance companies want to approach the consumer," said Dan Mendelson, president of Avalere Health, a consulting company. "If a patient is better off doing a home visit for someone to review their medications to remove them and eliminate those medications, I want that to happen, instead of someone just filling out."
The merger would also better isolate CVS and Aetna against imminent competition on two fronts.
The mere possibility that Amazon will soon start selling drugs has shaken the stocks of companies up and down the drug supply chain, from wholesalers to pharmacies. The agreement would expand CVS's business beyond the business of selling drugs and negotiating drug prices, managing all aspects of a patient's full medical care and could change their windows to become medical centers, instead of corridors full of consumer goods that people can easily buy in other stores or online.
The agreement would also protect against the competition of health insurers, particularly UnitedHealth Group, which have brought the business of negotiating drugs internally instead of buying services from an intermediary. It will effectively cut the middleman in negotiating drug prices for health insurers, since CVS is that intermediary today, and will lock Aetna's medical members for the pharmacy administration side of CVS businesses.
The medical care space has already been consolidated considerably – but it has also faced challenges. Last year, two health insurance mega-mergers between Aetna and Humana and Anthem and Cigna collapsed under antitrust opposition. But a merger between companies that do not compete directly is considered by many to be the best option.
"They will be able to offer you an insurance package that works best," said Craig Garthwaite, badociate professor of strategy at Kellogg School of Management at Northwestern. "There is a certain sense in which we are seeing a reorganization of the organizational structure, such that insurers are the owners of suppliers."
That fundamental restructuring is part of a change in the industry to handle different aspects of patient care, such as drugs or hospitalization – in isolation.
Martin Gaynor, professor of economics and health policy at Carnegie Mellon University, said that although a CVS-Aetna merger did not strike him as a deal that would clearly reduce competition, it was not clear why the companies needed to be combined at all. , since CVS already has Aetna's business as a pharmacy benefits manager.
"A big question mark for me is how the merged company improves," Gaynor said. "I wonder about many of these mergers, if they are really driven by a true increase in the value of the long-term value of the company, rather than looking for a short-term increase in share prices."
David Balto, former policy director of the Federal Trade Commission who led a coalition opposing insurance mergers, said he thought the merger would reduce competition and harm consumers.
He pointed to the Justice Department's recent challenge of a different merger: between AT & T and Time Warner, as evidence that such mergers could raise antitrust concerns.
"For those people who have spent endless hours and long queues in CVS stores, trying to figure out how to meditate while standing, this merger is bad news. It means, increasingly, that they will be forced into those long queues. CVS does not earn points in the service, and this type of vertical relationships that raise prices and deny options for consumers, "said Balto.