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CVS to Buy Aetna for $67.5 Billion, Remaking Health Sector
CVS Health Corp. will announce an about $67.5 billion deal for Aetna Inc., according to a person familiar with the matter, creating a health-care and retail giant that will have a hand in everything from health insurance to the corner drugstore.
Let's try to understand the deal first:
The deal is among the biggest health-care mergers of the past decade, combining the largest U.S. drugstore chain with the third-biggest health insurer. CVS also manages drug-benefits plans for employers and insurers, a business that could help steer some of Aetna’s 22 million customers into CVS drugstores when they fill a prescription. The deal will give Aetna’s insurance plans a closer on-the-ground tie to where customers get care.
This very pretty slide in the deck helpfully outlines what this "one stop shop" might look like for customers, and it's a pretty bold proposition:
The reality is that the only way you can give users that kind of real-time information is by owning the end-to-end customer experience and technology stack, and for CVS/Aetna that means integrating the insurance provider with medical care and point-of-sale.
Is Amazon getting into the pharmacy business? This is what you need to know
The massive online retailer with a reputation for disruption could be coming for the notoriously complex, opaque drug industry.
That’s because Amazon is expected to begin getting cash-pay and mail-order customers, eventually moving into the pharmacy-benefits manager and retail pharmacy business, Gupte said.
From that perspective, this line stood out in the CVS/Aetna deal press release:
CVS Health to Acquire Aetna; Combination to Provide Consumers with a Better Experience, Reduced Costs and Improved Access to Health Care Experts in Homes and Communities Across the Country | CVS Health
CVS Pharmacy locations will include space for wellness, clinical and pharmacy services, vision, hearing, nutrition, beauty, and medical equipment, in addition to the products and services our customers currently enjoy. An entirely new health services offering available in many locations will function as a community-based health hub dedicated to connecting the pathways needed to improve health and answering patients' questions about their health conditions, as well as prescription drugs and health coverage.
For competitors looking for their next move, don't be surprise if other large insurers go after urgent care centers like CityMD and large VC backed primary care practices like One Medical in order to get closer to their customers.