Possible Purchase of Aetna by CVS; Strategic Healthcare Implications

CVS has been reported to be in engaged in talks for the purchase ofAetna in what I would describe as movement toward vertical healthcare integration (see: CVS Is Said to Be in Talks to Buy Aetna in Landmark Acquisition). Below is an excerpt from this article:CVS Health, the giant drugstore chain that also runs walk-in clinics and a pharmacy benefit business, is in talks to buy Aetna, one of the nation ’s largest health insurance companies, according to people briefed on the talks....[I]f consummated, the deal could be worth more than $60 billion based on Aetna ’s current market value, which would make it one of the largest corporate acquisitions this year and one of the largest in the history of the health industry. The proposed combination reflects the blurring of traditional boundaries in health care, as established companies seek to find their footing in a rapidly changing environment....The negotiations are also taking place as the online retail giant Amazon encroaches on the turf of well-established players — and the pharmacy business could be next....A larger company — CVS and Aetna have combined annual revenues of about $240 billion — could enjoy greater leverage in negotiations with drug companies, helping it defend itself against newcomers like Amazon.....CVS, which reported revenue of $177.5 billion for 2016, is based in Rhode Island and opened its first store in 1963. It became a billion-dollar company in 1985. ....[I]t is also one of th...
Source: Lab Soft News - Category: Laboratory Medicine Authors: Source Type: blogs