Why Every Pharmacist Should Care About the CVS/Aetna Deal


Even if it doesn't happen, the deal says a lot about the current and future states of pharmacy.

In late October, reports surfaced that CVS Health was in talks to buy Aetna. Even if the deal doesn’t happen-and it may not-it says a lot about the current and future state of pharmacy. 

This deal could combine the nation’s largest pharmacy chain and its third-largest health insurer. CVS already owns one of the largest PBMs in the country, CVS Caremark, which means it would have unprecedented control over a large part of the pharmacy business.

Partner Problems

CVS Health may purchase Aetna for more than $200 a share-$66 billion total. If the deal goes through, CVS Health will control a pharmacy, a PBM, and an insurer-effectively all the steps from drug manufacturer to consumer. Aetna is already closely tied with CVS, with a contract running through 2019, but this deal would bring together some of the largest players in the pharmacy industry.

There will be regulatory hurdles. CVS recently signed a deal with Anthem to provide claims processing and prescription fulfillment for Anthem’s new PBM, IngenioRx-but the future of that agreements is unclear.

It’s been a bad year for large mergers: Walgreens scrapped its deal to buy Rite Aid, and Aetna had to throw out its deal with Humana-both after antitrust issues arose.

Read more: Walgreens/Rite Aid Merger Scrapped

Susan Hayes, the Principal at Pharmacy Outcomes Specialists, said that if the FTC does its job, the merger would not go through. “If the FTC approves this merger,” she said, “I think they have lost all concern for patients and plan sponsors-the little guy that they were formed to protect-not large corporations.”

However, some say the deal could happen. Perry Cohen, CEO of The Pharmacy Group, told Drug Topics that the deal should be thought of as more of a horizontal integration than a vertical one. CVS, he said, currently runs two “doors” of health care. Door one is delivery of health care in pharmacies and Minute Clinics. Door two is the financing of health care through the PBM. CVS buying Aetna would be a third door, and while it is related to financing and delivery of health care, is its own category. 

Cohen added that the FTC would investigate if it looks as if CVS would capture volume from others. However, employers may leave Aetna because of the move, and at least some health plans could leave CVS Caremark and go to other PBMs, he said.

A CVS spokesperson declined to comment on the deal, saying the company does not comment on market rumors.

Up next: Why the Deal?


Why the Deal?

While the the deal is uncertain, it will have an impact. It is indicative of larger forces affecting pharmacies. Many believe the possible deal is a response to Amazon eyeing pharmacy. Others see it as a way to stem rising drug costs and increase a pharmacy’s buying power. These are pressing issues for all pharmacies, and CVS acquiring Aetna may be tan attempt to manage them.

If Amazon enters the pharmacy market, it will radically alter how consumers view pharmacies, said Cohen. The prospect of Amazon selling drugs is “scary for retail pharmacy.” He envisioned a future where consumers never enter a physical location to pick up their medications, instead ordering through an app. CVS is not making the deal because of some strategic plan, he added, but the move would be made because “CVS is afraid of Amazon.”

Related article: Amazon Eyes PBMs

If Amazon or others can beat price and convenience every time, where does that leave retail pharmacy? Smaller pharmacies will need to pivot to value-based care. If they cannot compete on prices, they can provide high star ratings, which health plans like, according to Cohen. 

The key is to provide services that can reimbursed, which may not include dispensing. Cohen added that large chains like Walgreens, which tend to focus on volume rather than value-based services, will be left behind in the shakeup unless they can stay ahead.

If the Deal Goes Through

But if the CVS/Aetna deal goes through, it will help reshape the entire pharmacy landscape, Cohen said. It would impact mail, specialty, long-term care, home infusion, as well as retail pharmacies. Because CVS would be able to influence Aetna’s network composition, it would lead to a narrower network.

Hayes was blunter: “This merger cannot be good for independent pharmacies,” she said. CVS could mandate that Aetna customers use prefer or use only CVS pharmacies and then charge what it likes for prescription drugs because the PBM sets the price, which will hurt consumers and plan sponsors. “We have returned to the robber baron years, only instead of coal and railroad tycoons, we are at the mercy of pharmaceutical manufacturers and PBMs.”

But a CVS/Aetna merger is not a “game over” for retail pharmacy. If pharmacies can anticipate these changes, they can position themselves to deal with them, said Cohen.

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