"We also believe that the Trump administration is more business-friendly" and that regulators may view a CVS-Aetna deal "as a way to continue to put pressure on manufacturers and drug prices", David Larsen, an analyst at Leerink Partners, said in a recent note. "If you think about it, we actually don't have anything like that", Jefferies analyst Brian Tanquilut said recently. Now, they could offer one-stop shopping for insurance and certain diagnostic services.
Their vision expands beyond capitalizing on CVS' existing MinuteClinic structure, which largely offers preventative services like flu shots, the companies' chief executives said in an interview. Expect that trend to continue as the drugstore switches more from selling products in its stores to services that can't be bought online, where retailers face formidable competition from the likes of Amazon.
Aetna shares were trading at $184.84 at 6:33 a.m.in NY, well below CVS' $207-a-share offer for the company - a sign investors are skeptical the deal will close at the current price.
The company expects to invest billions of dollars in the coming years to add clinics and services, largely financed by diverting funds away from other planned investments. It's the latest example of the increasing consolidation of the healthcare industry and, in CVS' case, a way to help fend off the potential threat posed by Amazon.com Inc., which is looking to move into the pharmaceuticals business. Amazon has not commented on the possibility.
But the fact that CVS and Aetna are not really competitors could make it more likely that Washington will approve the combination. The bulked-up company also may gain more negotiating leverage over prescription drug prices, but it's far too early to say how much or whether that benefit will trickle down to customers.
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The combination of CVS and Aetna aims for something else. That's not clear. It's uncertain if the CVS-Aetna deal will be approved by federal regulators.
The $69 billion deal will affect more than 40 million Americans who are signed up under the health insurance giant.
The only pricier deals involving companies based our six-state region were: Bell Atlantic Corp.'s purchase of Conn. -based GTE Corp., which was valued at $71.3 billion and completed in 2000; and Conn. -based Charter Communications Inc.'s purchase of Time Warner Cable Inc., which was valued at $78.4 billion and completed in 2016.
"Patients with diabetes will receive care in between doctor visits through face-to-face counseling at a store-based health hub, and remote monitoring of key indicators such as blood glucose levels", CVS said in the announcement of the acquisition. "The companies can make that pitch".
Analysts have said the CVS-Aetna deal could prompt other healthcare sector mega-mergers, as rivals scramble to emulate the strategy.
The second-largest USA drugstore chain is buying Aetna (AET), the third-largest health insurer, in a $69 billion deal in order to push much deeper into customer care.