Aetna deal to change how big employers buy health benefits

Aetna deal to change how big employers buy health benefits

Aetna deal to change how big employers buy health benefits

CVS announced its acquisition of Aetna for $69 billion on Sunday.

The company explained this with an example of how diabetics could get quicker, easier treatment. It's an ambitious one for CVS, a company better known as a quick stop for Tylenol and a Coke.

"The main area of concern with the merger with Aetna and CVS, between two such big entities, would really create a monopoly".

"These types of interventions are things that the traditional health care system could be doing, but the traditional health care system lacks the key elements of convenience and coordination that help to engage consumers in their health", Merlo said in the release.

But it's not entirely clear if or how quickly savings would get passed down to consumers. CVS says its pharmacists and nurse practitioners can provide ongoing health care for people with chronic conditions like diabetes, high blood pressure or asthma.

One of the few areas where the companies directly overlap is in the Medicare drug business.

Meanwhile, deeper collaboration between Aetna's insurance business and CVS's PBM division could drive down drug costs by adding clients and boosting the PBM's leverage with drugmakers.

"I think over time you're going to see less of that front-store retail and more health care services in their stores", said Jeff Jonas, a portfolio manager for Gabelli Funds who follows drugstores.

Shareholders of both companies and regulators must approve the deal.

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Keep in mind that Aetna had tried to merge with competitor Humana and that deal was blocked on antitrust grounds.

Health care prices are rising at "an unsustainable rate", Merlo told the publication. The deal comes at a time when the future of the health care industry is up in the air. CVS also has to worry about competition from UnitedHealth Group Inc.

The CVS-Aetna deal could attract similar scrutiny if regulators feared it could block Aetna customers from frequenting other pharmacies or contracting with other PBMs, several investors said, asking not to be named because they were not authorized to talk to the press.

Amazon reportedly may jump into the drug market and turn it upside down.

Could Amazon, which has expanded its own brick and mortar operations through the opening of its own book stores and purchase of Whole Foods, be looking to become a big drug store retailer as well?

Americans could benefit from the planned merger of the health insurance provider Aetna and CVS, but some health care analysts caution that one unintended outcome could be a race toward greater consolidation in the industry, which could have as-yet-unknown impacts on access and cost of care.

CVS and Aetna argue that their deal will lower healthcare costs for employees of their large corporate customers, giving the company greater clout to negotiate down drug prices and better manage the use of those medicines. Combining the two businesses may help trim costs by tying together pharmacy services with health care benefits, aligning the services that otherwise would have separate profit goals.

The deal "would definitely be scrutinized, but ultimately we still see a path for it to get through", Newshel said in an email.

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