- CVS Health is in talks to buy Aetna for $200 a share, or about $66 billion, according to a Wall Street Journal report citing "people familiar with the matter." Neither company immediately responded to the news article.
- The company that would result from such a deal would have an annual revenue of about $240 billion, second only to Walmart in the U. S., according to Axios.
- CVS currently provides pharmacy benefit services to Aetna, but also recently agreed to service pharmacy benefit management to rival payer Anthem beginning in 2020.
The deal reportedly being discussed would be a game changer for the healthcare industry, with implications far beyond the payer market. In addition to its drug stores, CVS has a pharmacy-benefit management arm operates more than 1,100 retail clinics.
The CVS MinuteClinics had 8% revenue growth in the second quarter of this year while retail and pharmacy sales declined. Retail clinics are gaining popularity as patients look for convenience and payers push for more care to take place in outpatient settings.
The discussions could be prompted by Amazon’s apparent interest in entering the pharmacy business. The online retailer has received approval from several state pharmacy boards to become a wholesale distributor. If Amazon does indeed move into the pharmaceutical space, CVS and Walgreens would find themselves up against a competitor that has a history of major disruption.
If an agreement is reached, it would likely be scrutinized on antitrust terms. The combined company would be a behemoth that could leverage its buying power to drive down drug payments and provider reimbursement rates.
Aetna previously attempted a megamerger with another insurer — Humana. That deal was blocked in court because of antitrust concerns. That was also the reason given when Walgreens was forced to scale back its planned acquisition of Rite Aid earlier this year. Walgreens this week announced it would close about 600 Rite Aid drugstores beginning next spring.