In late October, reports surfaced that CVS Health was in talks to buy Aetna. Even if the deal doesn’t happen—and it may not—it says a lot about the current and future state of pharmacy.
This deal could combine the nation’s largest pharmacy chain and its third-largest health insurer. CVS already owns one of the largest PBMs in the country, CVS Caremark, which means it would have unprecedented control over a large part of the pharmacy business.
CVS Health may purchase Aetna for more than $200 a share—$66 billion total. If the deal goes through, CVS Health will control a pharmacy, a PBM, and an insurer—effectively all the steps from drug manufacturer to consumer. Aetna is already closely tied with CVS, with a contract running through 2019, but this deal would bring together some of the largest players in the pharmacy industry.
There will be regulatory hurdles. CVS recently signed a deal with Anthem to provide claims processing and prescription fulfillment for Anthem’s new PBM, IngenioRx—but the future of that agreements is unclear.
It’s been a bad year for large mergers: Walgreens scrapped its deal to buy Rite Aid, and Aetna had to throw out its deal with Humana—both after antitrust issues arose.
Susan Hayes, the Principal at Pharmacy Outcomes Specialists, said that if the FTC does its job, the merger would not go through. “If the FTC approves this merger,” she said, “I think they have lost all concern for patients and plan sponsors—the little guy that they were formed to protect—not large corporations.”
However, some say the deal could happen. Perry Cohen, CEO of The Pharmacy Group, told Drug Topics that the deal should be thought of as more of a horizontal integration than a vertical one. CVS, he said, currently runs two “doors” of health care. Door one is delivery of health care in pharmacies and Minute Clinics. Door two is the financing of health care through the PBM. CVS buying Aetna would be a third door, and while it is related to financing and delivery of health care, is its own category.
Cohen added that the FTC would investigate if it looks as if CVS would capture volume from others. However, employers may leave Aetna because of the move, and at least some health plans could leave CVS Caremark and go to other PBMs, he said.
A CVS spokesperson declined to comment on the deal, saying the company does not comment on market rumors.
Up next: Why the Deal?