Q&A: $69 billion Aetna bid pushes CVS deeper into consumers’ lives -

Q&A: $69 billion Aetna bid pushes CVS deeper into consumers’ lives

Q&A: $69 billion Aetna bid pushes CVS deeper into consumers’ lives




A drugstore chain that used to hawk cigarettes behind the entrance counter now needs to supply diet recommendation and work along with your physician to maintain you wholesome.

CVS Well being says it needs to make use of its roughly $69 billion acquisition of the insurer Aetna to dive deeper into managing buyer well being, with its practically 10,000 shops turning into “entrance doorways” for care. The businesses plan to broaden the well being providers provided by way of CVS areas and get extra concerned in serving to sufferers keep on their medicines or handle their continual circumstances.

The deal introduced Sunday will pair the second-largest U.S. drugstore chain with the third-largest well being insurer. Right here’s the way it will seemingly play out.

Q: How will shops change?

A: The deal pushes CVS additional down a path it began years in the past when it started including clinics to its shops and later give up promoting tobacco. Over time, CVS plans to bulk up the well being care providers it presents by way of its shops and the area it devotes to them.

The corporate already has began testing imaginative and prescient and listening to help facilities at 15 and 32 areas, respectively. It additionally does blood attracts and monitor continual circumstances like hypertension at sure shops.

The corporate would possibly add to the 1,100 clinics it operates, broaden into promoting extra medical gear or provide nutritionists to counsel clients.

CVS leaders suppose its huge footprint — practically 70 % of the U.S. inhabitants lives inside three miles of a CVS pharmacy — offers it a possibility to construct a deeper relationship with clients.

Q: Are they attempting to exchange my household physician?

A: CVS needs to enrich physician care, CEO Larry Merlo stated Monday throughout a convention name to debate the deal.

For instance, Merlo stated folks with diabetes usually see their physician a number of occasions a 12 months, however might have bother sticking with a therapy plan. The corporate stated it may well assist sufferers keep on a plan, utilizing its community of pharmacists, clinics and different future providers.

“We’re locally, we’re seeing these sufferers. We’re turning into a part of their each day lives and routines,” he stated.

Q: Will this make my pharmaceuticals cheaper?

A: Not within the close to time period, in keeping with Edward Jones analyst John Boylan.

The deal doesn’t change how medication are priced. It simply places key gamers in that negotiation — drugstores and pharmacy advantages managers — beneath the identical roof as an insurer, Boylan stated.

CVS processes greater than a billion prescriptions yearly as one of many nation’s largest pharmacy profit managers, operating prescription drug protection for giant shoppers like Aetna.

Over time, a bulked-up CVS might acquire some negotiating energy over prescription costs, but it surely’s exhausting to say whether or not that may translate to decrease costs for shoppers.

The deal may make different care parts cheaper, particularly for Aetna clients who would possibly get incentives like no co-payments to encourage use of CVS clinics for fundamental, non-emergency care.

Q: What’s the enterprise case for this deal?

A: Shopping for Aetna offers CVS a approach to higher compete with different big nationwide well being care firms like UnitedHealth Group Inc. The nation’s largest insurer additionally runs a giant pharmacy profit administration enterprise and operates clinics and physician workplaces.

Aetna will function as a separate model inside CVS. The deal additionally will assist CVS hold rivals from poaching its 22 million clients.

Retailers like CVS face rising on-line competitors, particularly for the patron merchandise they promote exterior retailer pharmacies. By including extra providers, the drugstores can be promoting one thing clients can not purchase on-line.

CVS additionally hopes to get clients to make use of its shops and providers extra. Drugstores have discovered that clients aren’t significantly loyal to 1 chain and can fill their prescriptions the place their protection tells them or the place they’ll get one of the best deal.

“I’m not going to depart my job simply because they took CVS out of my community,” Jefferies analyst Brian Tanquilut stated.

Q: When will this deal shut?

A: The businesses count on that to occur within the second half of subsequent 12 months. Nonetheless, it nonetheless has to cross federal anti-trust scrutiny.

Aetna has a tough document with that. The Division of Justice sued to cease its roughly $34-billion acquisition of fellow insurer Humana. That deal fell aside earlier this 12 months.

CVS and Aetna each provide Medicare Benefit prescription drug protection, and a few of which will need to be offered to handle anti-trust considerations. Total, the companies of Woonsocket, Rhode Island-based CVS Well being Corp. and Hartford, Connecticut-based Aetna Inc. have a lot much less overlap than different offers which were swatted by regulators.