Walmart Eyes Two Big Purchases
Walmart is in preliminary talks to acquire Humana, according to The Wall Street Journal, a move that some analysts say is Walmart’s attempt to stave off competition from Amazon’s impending entry into the healthcare marketplace.
Simultaneously, Walmart is considering buying PillPack, a start-up that helps patients manage their prescriptions by packaging pills together and delivering them, CNBC reports. Amazon also attempted to acquire the online pharmacy start-up, according to CNBC.
Meanwhile, Walmart and Humana already partner on the “Humana Walmart Rx Plan,” designed for seniors eligible for Medicare Part D drug benefits.
In addition, the U.S. government’s new initiative to boost payments to insurers who run private Medicare Advantage (MA) plans by nearly twice as much as the government had previously estimated makes Humana even more valuable to Walmart—and other interested buyers.
Humana is the second largest MA insurer in the U.S., according to Bloomberg.
“Walmart and Humana’s existing relationship with their co-branded prescription drug offering does indicate that the acquisition may happen,” Santilli tells Drug Topics. “Walmart’s strategy to acquire Humana would extend its reach into healthcare and position the company to compete with Amazon’s entry into the market.”
The acquisition of Humana would also give Walmart more control over healthcare for its 1.5 million employees, according to Santilli. “Increasing the attractiveness of Humana, the government recently announced it would boost payments to insurers who run private Medicare Advantage (MA) plans by nearly twice as much as the government had previously estimated,” he says.
Similarly, Walmart’s proposed acquisition of PillPack is a response to Amazon’s entry into the healthcare market—and a way for Walmart to expand its pharmacy services, Santilli says.
“Walmart’s 4,500 pharmacies would increase its competitiveness with retail pharmacies by expanding its reach with seniors and people living with chronic conditions as PillPack describes itself as a ‘full-service pharmacy that sorts your medication by the dose and delivers to your door.’”