STREAMING NOW: Watch Now
CLOSINGS: View Closings

CVS and Aetna's game-changing merger gains crucial approval

A landmark health care merger is inches away from the finish line. CVS has gained the US government's approv...

Posted: Oct 10, 2018 6:35 PM
Updated: Oct 10, 2018 6:35 PM

A landmark health care merger is inches away from the finish line. CVS has gained the US government's approval to buy Aetna.

The $69 billion acquisition, announced in December 2017, will drastically remap the health care industry. CVS (CVS) is a massive drugstore chain and prescription insurer, and Aetna (AET) is one of the nation's largest health insurers.

Aetna Inc

Amazon.com Inc

Business and industry sectors

Business, economy and trade

Companies

Company activities and management

Company strategy

CVS Corporation

Drug prices

Drug stores

Health and medical

Health care

Health care costs

Health insurance

Insurance

Mergers and acquisitions

Pharmaceutical industry

Pharmaceuticals and biotechnology

Pharmaceuticals and prescription drugs

Pharmacies and pharmacists

Prescription drug insurance

Retail and wholesale trade

UnitedHealth Group

Antitrust and trade law

Economic policy

Economy and economic indicators

Law and legal system

Trade and development

Trade regulation and policy

It is the largest health insurance deal in history, far exceeding Express Scripts' (ESRX) $29 billion acquisition of Medco in 2012, the last record-holder.

To gain the Trump administration's approval, Aetna agreed to spin off its Medicare Part D prescription drug business. The Justice Department settled with CVS and Aetna on Wednesday. Pending a judge's approval of the settlement, the deal will be completed.

The deal was expected to gain antitrust approval. CVS dominates the pharmacy business, but it accepts insurance from Express Scripts and other rivals, not just the CVS-owned Caremark plan. Aetna and CVS' businesses won't compete at all after Aetna divests its Medicare business.

CVS already serves as the pharmacy benefits manager for Aetna customers, so CVS won't be adding any share of the market by buying the insurer. One big caveat: The companies negotiate those agreements every few years, so CVS wouldn't have to worry about losing Aetna to a rival one day.

Antitrust regulators believe people could benefit from the combined powers of the two companies. The merger could lower American's health care costs and improve the quality of care patients receive, Assistant Attorney General Makan Delrahim said in a statement.

Buying Aetna puts CVS in a better position to compete with other integrated health care providers, such as UnitedHealthcare (UNH) and pharmacy benefits manager Optum. PBMs like Optum and CVS's Caremark help manage prescription drug plans for commercial health insurers.

It also helps the companies fend off Amazon (AMZN), which looms large in the health care market even though it hasn't made a major entry yet. Amazon sells its own line of over-the-counter drugs online, and it recently bought online prescription delivery business PillPack. But Amazon does not sell insurance or clinical appointments. Not yet, anyway.

What it means for consumers

CVS has more than 9,700 pharmacies and 1,100 Minute Clinics. The combination could make it easier for people to monitor diseases without having to see a doctor.

The combined company envisions transforming CVS; walk-in clinics into something like the medical version of the Genius Bar at Apple Stores. Experts will dispense quick, convenient and reliable health care knowledge, Aetna and CVS have said.

Currently, CVS' walk-in locations offer vaccinations, lab tests and diagnosis and treatment of illnesses like strep throat and ear infections from nurse practitioners and physician assistants. In the future, CVS and Aetna said that patients will be able to go to a local CVS in between doctor visits for glucose level monitoring, counseling on how and when to use medications and advice on weight loss programs and better dietary habits.

The new company says it wants to create a "new front door" to the health care system.

If realized, that vision could save patients a lot of time and money. How quickly customers might start saving — and how much cheaper drugs might actually be — isn't yet clear.

Advocacy groups have criticized the deal.

"The combination of CVS and Aetna creates an enormous market force that we haven't seen before," said George Slover, senior policy counsel for Consumers Union, in a statement on Wednesday. "This type of consolidation in a market already dominated by a few, powerful players, presents the very real possibility of reduced competition that harms consumer choice and quality."

Huntsville
Clear
28° wxIcon
Hi: 43° Lo: 20°
Feels Like: 23°
Florence
Clear
27° wxIcon
Hi: 46° Lo: 23°
Feels Like: 27°
Fayetteville
Clear
25° wxIcon
Hi: 43° Lo: 20°
Feels Like: 18°
Decatur
Clear
27° wxIcon
Hi: 43° Lo: 20°
Feels Like: 22°
Scottsboro
Few Clouds
28° wxIcon
Hi: 43° Lo: 21°
Feels Like: 28°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Cases: 249524

Reported Deaths: 3578
CountyCasesDeaths
Jefferson33064500
Mobile19951362
Madison13596148
Tuscaloosa13246154
Montgomery12435236
Shelby1061677
Baldwin889098
Lee781466
Morgan686150
Etowah643966
Calhoun6430121
Marshall635355
Houston537738
DeKalb492236
Cullman451542
Limestone433345
St. Clair432555
Lauderdale422354
Elmore412964
Walker3710111
Talladega359354
Jackson329823
Colbert329642
Blount299740
Autauga278042
Franklin256434
Coffee248315
Dale236254
Chilton227438
Dallas226832
Russell22383
Covington220434
Escambia198931
Tallapoosa184391
Chambers177950
Pike159914
Clarke159819
Marion143636
Winston135123
Lawrence131636
Pickens125718
Geneva12438
Marengo123124
Bibb119617
Barbour117811
Butler117842
Randolph104921
Cherokee103424
Hale97831
Fayette92516
Washington92219
Clay92024
Henry8756
Lowndes80229
Monroe79011
Cleburne77814
Macon74522
Crenshaw72030
Bullock70219
Perry6906
Lamar6898
Conecuh68814
Wilcox64218
Sumter58622
Greene42818
Choctaw42713
Coosa3544
Out of AL00
Unassigned00

Tennessee Coronavirus Cases

Cases: 374493

Reported Deaths: 4602
CountyCasesDeaths
Shelby48561673
Davidson43546421
Knox19358150
Rutherford18248163
Hamilton17311153
Williamson1168080
Sumner10123137
Out of TN811056
Wilson777980
Montgomery691585
Sullivan6641101
Washington6272108
Maury610667
Putnam600982
Blount575261
Bradley546935
Madison5445111
Sevier512133
Unassigned488822
Robertson389553
Tipton375339
Hamblen360761
Gibson332065
Dyer325451
Greene324872
Anderson310729
Dickson300434
Coffee288642
Carter286057
Bedford285132
Lawrence276134
Obion271751
McMinn267955
Cumberland266536
Roane243929
Warren243120
Jefferson236533
Loudon234819
Fayette230239
Hardeman227837
Monroe223244
Weakley221737
Franklin217935
Lauderdale208023
Hawkins204034
Wayne194610
Trousdale191512
Henderson190134
Macon186028
White180818
Rhea180132
Hardin180025
Marshall179622
Carroll178534
Lincoln166217
Haywood165830
Cheatham165317
Cocke165330
Campbell160323
Henry159319
Overton156435
Giles150249
Smith147720
Johnson144923
McNairy142433
Fentress124420
Hickman121619
DeKalb120422
Bledsoe11895
Lake11786
Crockett117126
Marion112219
Scott11197
Grainger105017
Chester104221
Decatur96112
Unicoi90226
Claiborne8979
Benton84214
Grundy79214
Cannon7864
Lewis77714
Morgan7626
Humphreys7418
Union7375
Jackson69410
Polk69415
Stewart61015
Houston59220
Clay56018
Sequatchie5465
Meigs51013
Perry49221
Moore4043
Pickett39513
Van Buren3792
Hancock1833

Community Events