CVS Health in acquisition talks with Aetna
The federal government had no sooner busted the proposed merger of Humana and Aetna, than CVS Health began working quietly to acquire Aetna in a $66 billion deal.
First, big box drugstore retailers such as CS and Walgreens added primary care services to their businesses awhile ago. They started giving flu shots and then began to add small clinics in some of their retail locations.
Now, according to the latest issue of the Wall Street Journal, CVS Health sees room for expansion into health insurance as it engages Aetna in talks for a possible acquisition amounting to $66 billion.
Steve Kraus, a partner with Bessemer Venture Partners whose healthcare investments include health insurance startup Bright Health among others, told the newspaper that this is the logical next step in the consumerization of healthcare. This is a play to “own” the healthcare consumer, he said.
Kraus thinks that this may just as easily be a way to address the threat posed by Amazon as the online retailer formulates its healthcare strategy.
“If CVS is the insurer and has the retail footprint to provide not only pharmacy but routine care through its minute clinic operations, then it in many ways owns the lifecycle of the consumer from insurance to care provision.”
Open enrollment is scheduled to kick off next week, and the Trump administration is determined to dismantle Obamacare and put an end to paying subsidies to health insurers as soon as possible. A federal judge backed the decision to the dismay of attorneys general from eighteen states. And yet, Oscar, Clover Health, Bright Health and Devoted Health don’t seem intimidated by these changes and see possible big opportunities.
There’s more transformation to come. Anthem is parting ways with Express Scripts, a company that has its own transformation plans to be a pharmacy benefits manager in its own right.
Online retailer Amazon is positioning itself in a way that suggests it could either be a pharmacy benefits manager or partner with one. According to the St. Louis Post-Dispatch, Amazon has acquired wholesale pharmacy licenses in at least 12 states, including Nevada, Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New Hampshire, Oregon and Tennessee.
The pharmaceutical industry is also facing some significant changes depending on whether other states take a lesson from California to limit drug prices by forcing companies to justify why they need to increase them.
Things are too much in flux to see what will shake out in the future.