Will CVS buy Aetna for $66 billion?

CVS is in talks to buy Aetna for $66 billion.  This would be a merger between one of the largest pharmacy benefits managers (PBM) in the country and the third largest insurer.

A successful deal could push millions of Aetna’s members toward CVS’s retail pharmacies, walk-in Minute Clinics, and services such as home visits for infusion drugs at a time when retail pharmacy companies are facing stiff competition.

It would also give Aetna the ability to move deeper into the lives of the 44.7 million people it serves and manage their health more efficiently. For example, the insurer might be able to get better insight into whether patients are taking their drugs by gaining access to data from CVS clinics and retail counters.

However, there may be another reason for the deal.  Amazon may be entering the medical device and even eventually the PBM business.

Amazon has received approval for wholesale pharmacy licenses in at least 12 states, including Nevada, Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New Hampshire, Oregon and Tennessee.

However, the CVS-Aetna deal may never happen. According to Bruce Japsen of Forbes:

Anthem just last week said it was forming its own pharmacy benefit management company, IngenioRx, with CVS, which operates a PBM. That was seen as a way to compete with the nation’s largest health insurer, UnitedHealth Group, which owns the PBM OptumRx.

But  for  CVS to operate a PBM with Anthem, the No. 2 health insurer, while owning Aetna, the No. 3 insurer, would be highly unusual coming off a period of intense antitrust scrutiny of the health insurance industry. Aetna and Humana, the nation’s fourth-largest insurer, pulled the plug on their merger last year after intense antitrust scrutiny over the potential creation of a monopoly purchaser of health services.

The health care market is rapidly evolving.  In the words of Heraclitus, “you cannot step twice into the same stream” or put more simply, “The only thing that is constant is change“.

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