CVS health is buying Aetna for $69 billion in 2017’s biggest deal. Aetna is the 3rd largest insurer in the United States. The deal will make CVS, a company with a health insurer, a retail pharmacy, and will negotiate prescription drug prices with drug markers. This will completely change the medical world it being one of the biggest mergers. Time is also a factor concerning the companies deal maker since there are speculations that Amazon will also join pharmacy business with very low prices, fast delivery and a big network of shoppers. A deal would most likely be valued at $200 to $205 per Aetna share. Aetna will also be launching its own PBM which is Ingenio Rx.
“The acquisition gives CVS more scale to bargain for better prices for the prescription drugs it sells through its PBM business. It also fortifies Aetna’s insurance business by creating the ability to offer its customers cheaper co-payments, presumably only in CVS stores.” CVS would also own every step of prescription drug process except drug wholesalers. They would also keep much of the money changing hands with the same company except of being in charge of shipping the drugs to pharmacies or other drug stores. With Aetna deal, CVS control everything that happens once a wholesaler has handed off the drug.
In my opinion, this could be a great game changer in the medical industry since some of the biggest companies, being Aetna and CVS already have valuable loyal customers who would be more inclined to taking part of this service. This has the potential to put CVS on top of the medical industry and being a strong competitor to Amazon if they do decide to join the medical industry as well.