CVS buying Target’s pharmacies, clinics
CVS announced a $1.9 billion-dollar deal to acquire Target’s more than 1,660 pharmacies and nearly 80 clinics in 47 states.
CVS announced a $1.9 billion-dollar deal to acquire Target’s more than 1,660 pharmacies and nearly 80 clinics in 47 states.
Each in-store pharmacy will be rebranded as a CVS/Pharmacy and each clinic as a MinuteClinic. Additionally, CVS will open up to 20 new clinics in Target stores within three years of the deal’s close.
"This strategic relationship with Target supports the highly complementary customer base, brand and culture we share," Larry Merlo, CVS Health president and CEO, stated in a joint release from both companies. "This relationship with Target will provide consumers with expanded options and access to our unique healthcare services that lead to better health outcomes and lower overall healthcare costs."
Brian Cornell, Target’s chairman and CEO, said the deal would enhance the healthcare offerings for Target customers, as CVS can provide low-cost generic options. “By partnering with CVS Health, we will offer our guests industry leading healthcare services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests."
The deal will help CVS expand its presence in Denver, Seattle, Portland, and Salt Lake City.
The deal is expected to close before 2016. In the first two years following the close, the two companies plan to develop up to 10 small-format stores that will be called TargetExpress. Each would include a CVS pharmacy.
"We operate in a rapidly changing healthcare and regulatory environment," Merlo said. "This requires companies like CVS Health to continually innovate, providing additional points of access, lowering costs, and improving quality for both consumers and payors."
CVS said it would offer Target’s 14,000 healthcare professionals comparable positions. It also said the deal would be financed through debt.
The National Community Pharmacists Association (NCPA) said the proposed CVS/Target deal increases the need for legislation that guarantees Medicaid and Medicare patients can fill prescriptions at independent pharmacies.
“Further consolidation in the retail setting means pharmacy services are increasingly available only from a fewer number of larger entities,” said NCPA CEO B. Douglas Hoey, RPh, MBA. “The CVS-Target deal reinforces the need and strengthens the case for allowing patients to use ‘any willing pharmacy’ that accepts a drug plan’s terms and conditions, such as reimbursement.”
NCPA has endorsed The Ensuring Seniors Access to Local Pharmacies Act (H.R. 793/S. 1190). It would allow patients in underserved areas to access discounted copays at their local pharmacy.
“Patients in underserved rural and inner-city areas rely on access to independent community pharmacies for prescription medication and counseling,” Hoey said. “For these and some other patients, national pharmacy chains are not a practical option.”
