Published: Tue, December 05, 2017
Finance | By Loren Pratt

CVS Pharmacy in the works to buy Aetna in $69 billion deal

CVS Pharmacy in the works to buy Aetna in $69 billion deal

CVS Health said on Sunday that it had agreed to buy Aetna for about $69 billion in a deal that would combine the drugstore giant with one of the biggest health insurers in the United States and has the potential to reshape the nation's health care industry. Including Aetna's debt, the total value of the transaction is $77 billion.

A merger between CVS and Aetna is a shot across the bow that's aimed directly at primary care practices and other traditional providers.

The acquisition of a major health insurer is a massive if natural extension of CVS's ambitions to become a healthcare-focused company. With a repeal of the ACA's individual insurance mandate built into the tax bill recently passed by the Senate, new questions about patients' costs and choices will inevitably arise. As part of the deal, Bertolini would join the CVS board and Aetna would be run as a stand-alone business unit.

"It's not quite explicit yet what they're planning on doing but whatever it is, it's scaring CVS", Rowe said about Amazon.

It is not clear how the deal might impact prescription drug costs, but it is expected to bring a broad new customer base for CVS creating a single stop where patients can have blood drawn, visit a nurse, and pick-up prescriptions.

"We also believe that the Trump administration is more business-friendly" and that regulators may view a CVS-Aetna deal "as a way to continue to put pressure on manufacturers and drug prices", David Larsen, an analyst at Leerink Partners, said in a recent note. He added that "CVS/Aetna may be able to provide more personalized care [and] develop more personalized relationships with members, which can help with innovation in care delivery and may help reduce unnecessary care".

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