Before 2018, one of the largest pharmaceutical and drugstore chains, CVS, and one of the oldest insurance companies, Aetna, hope to finalize a $70 billion merge.
To gain control of costs and provide better quality, health insurance companies are narrowing their network of doctors, hospitals, and pharmacies. Due to this, CVS has taken a hit in profits during the third quarter.
Aetnas shares have already risen more than 7 percent since the report of the merge, and it is estimated that the value will be more than $200 per share. CVS has managed Aetna’s pharmacy benefits since 2010, and by merging, CVS would not only gain millions of new customers by consolidating with Aetna, but they would also have more leverage when negotiating prices with drug makers.
There have been rumors of Amazon attempting to enter the market of drug sales. Amazon has already been approved licenses in 12 states for wholesale drug distribution. CVS and Aetna are attempting to block Amazon’s move by cornering the market so that Amazon cannot invade.
Although CVS representatives have not commented on the merge, the chief executive Larry Merlo has stated that they aim to produce more quality care at lower costs. They will also begin next day delivery of medications directly to patients’ doors, which will start in early 2018. President of CVS Pharmacy Helena Foulkes stated, “our goal is to meet the needs of our all of our customers wherever, however, and whenever they want. Providing same and next-day options for delivery of medications is just another way we can help our patients get and stay healthy.”
This merge between CVS and Aetna will open the door for a shift in business of the consolidation between health insurers and pharmacies. It would be a swifter approach for these companies to manage the continuous rising health and drug costs, and offer quality care to customers.