Beyond Rx? CVS Health-Aetna deal may mean more services

Beyond Rx? CVS Health-Aetna deal may mean more services

CVS Well being needs to do rather more than fill your prescription or jab your arm with an annual flu shot.

The second-largest U.S. drugstore chain is shopping for Aetna, the third-largest well being insurer, with a view to push a lot deeper into buyer care. The evolution gained’t occur in a single day, however in time, customers could discover extra clinics in CVS shops and extra companies they will obtain via the community of practically 10,000 places that the corporate has constructed.

“They’ll be just about a soup-to-nuts well being firm … apart from the hospital a part of it,” mentioned Craig Johnson, president of Buyer Progress Companions, a retail consulting and analysis agency.

Sufferers additionally could discover the CVS-Aetna mixture rather more concerned in managing their care, particularly for these with costly power circumstances like diabetes. The bulked-up firm additionally could acquire extra negotiating leverage over prescription drug costs, nevertheless it’s far too early to say how a lot or whether or not that profit will trickle right down to clients.

The $69 billion deal introduced Sunday night will push the pharmacy chain extra forcefully in a path it has been heading for years, in response to Wall Road analysts. The corporate, which stopped promoting tobacco merchandise in 2014 to additional burnish its picture as a care supplier, already runs about 1,100 clinics and has been steadily increasing the well being care it provides.

The clinics began off as a spot to deal with primary well being care wants like sinus infections or strep throat. Step by step, CVS added companies like blood attracts or monitoring of power circumstances corresponding to hypertension and diabetes. Count on that development to proceed as the pharmacy switches extra from promoting merchandise in its shops to companies that may’t be purchased on-line, the place retailers face formidable competitors from the likes of Amazon.

“I believe over time you’re going to see much less of that front-store retail and extra well being care companies of their shops,” mentioned Jeff Jonas, a portfolio supervisor for Gabelli Funds who follows drugstores.

The mammoth acquisition pairs an organization that runs greater than 9,700 drugstores with an insurer masking round 22 million individuals. CVS Well being Corp. can also be one of many nation’s largest pharmacy profit managers, processing greater than a billion prescriptions a yr for shoppers like massive employers and insurers together with Aetna Inc.

Analysts say the mixed firm may add extra clinics and broaden in-store companies to incorporate eye care or possibly facilities for listening to aids. That might step by step flip CVS right into a one-stop-shop for well being care, a spot the place sufferers can get a listening to assist checked, then see a nurse practitioner and choose up prescriptions.

“If you consider it, we truly don’t have something like that,” mentioned Jefferies analyst Brian Tanquilut mentioned.

Clinics aren’t particularly worthwhile, however they’re necessary as a result of they draw individuals into the shops and assist construct deeper buyer relationships, analysts say.

The clinics have develop into a gorgeous possibility for purchasers in want of primary well being care as a result of they’re normally open longer than the household physician’s workplace. A clinic go to additionally may be cheaper than a $100 physician go to for somebody who doesn’t have insurance coverage, however they’ve drawbacks. Household medical doctors say they know their sufferers higher and might examine on their total well being throughout a go to reasonably than coping with simply the one difficulty that introduced that individual in.

Some CVS customers are also skeptical about getting their well being checked in a retail retailer.

Jessy Tatenco, 23, buys home goods and over-the-counter drugs for his three youngsters at CVS. However he mentioned can be reluctant to get medical companies there. He feels extra comfy in a health care provider’s workplace or conventional clinic setting.

“I wouldn’t belief them with my well being care. They promote toys,” he mentioned after leaving a CVS retailer Sunday in downtown San Diego.

CVS isn’t the one well being care big delving into medical care. The deal will assist it compete with others like UnitedHealth Group Inc. The nation’s largest well being insurer additionally runs clinics and physician’s workplaces. Like CVS, it additionally has one of many nation’s largest pharmacy profit administration companies.

An indication stands on the campus of the Aetna headquarters, in Hartford, Conn. —Invoice Sikes/Related Press/File
CVS and Aetna additionally wish to transcend simply clinic visits to assist sufferers and clients.

Aetna Chairman and CEO Mark Bertolini has talked incessantly about how most of an individual’s life expectancy is set by genetics and placement and never by medical care, which is the place well being care spending is targeted.

“Our typical working mannequin will not be efficient,” Bertolini mentioned earlier this yr. “Persons are offended at this mannequin. It doesn’t work successfully in controlling prices.”

He has talked about the necessity to get into sufferers’ properties to gauge what they want, like whether or not they have sufficient meals or might have transportation.

CVS can assist via its house infusion enterprise, which sends nurses to sufferers’ properties to ship advanced medicine for individuals with hemophilia amongst different circumstances. The clinic and drugstore places may additionally give sufferers with power circumstances like diabetes extra handy choices to get their blood monitored or counseling on their situation.

Over time, well being care consultants say that may assist maintain these circumstances from rising worse and stave off costly hospital stays.

CVS pays about $207 in money and inventory for every share of Aetna. The boards of each corporations have accredited the deal, and the businesses count on the deal to shut within the second half of subsequent yr.

However ant-trust regulators nonetheless want to judge it.

The Justice Division mentioned final month that it’s suing AT&T to cease its $85 billion buy of Time Warner. Regulators additionally sued to cease the Aetna’s roughly $34 billion buy of rival Humana Inc. — a deal that fell aside earlier this yr.

Hartford, Connecticut-based Aetna and Woonsocket, Rhode Island-based CVS each handle Medicare prescription drug protection. A few of that enterprise could must be offered to deal with antitrust issues. However in any other case, Leerink analyst David Larsen thinks a CVS-Aetna mixture has respectable odds of getting previous regulators, partially as a result of the companies have little overlap.