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November 25, 2020 09:00pm
By Sara Karlovitch, Assistant Editor
CVS Health announced that it has closed its acquisition of Aetna with the promise to transform the consumer health experience.
CVS Health announced today that it has finalized its acquisition of Aetna, representing another example of the shift toward major vertical consolidation in the health care industry, according to a press release.1
The final deal valued Aetna at approximately $70 billion, with the total value of the transaction at $78 billion, CVS stated.1
With Department of Justice clearance, the companies’ last hurdle to closing the deal was the approval from New York, which was granted on Monday. As part of the approval, CVS and Aetna agreed to several conditions, such as including enhanced consumer and health insurance rate protections, privacy controls, cybersecurity compliance, and a $40 million commitment to support health insurance education and enrollment.2
According to CVS, new products and services developed by the merged company will be broadly available to the health care marketplace, regardless of one’s insurer, pharmacy benefit manager, or pharmacy of choice. This includes new programs and services designed to target better, more efficient management of chronic disease using the integrated capabilities of the combined company in technology, data, and analytics. Other enhanced health services will focus on expansion of services at MinuteClinic, nutritional and behavioral counseling, and benefit navigation support, as well as assistance with durable medical equipment, digital health apps, and connected devices.1
CVS officials have said that the deal presents a novel opportunity to rethink access to lower cost, high-quality care in various settings and ultimately reshape the consumer health experience. However, health advocacy groups have urged for the merger to be blocked, indicating that the acquisition could negatively affect patients.
At a hearing held by New York regulators earlier this year, AIDS Healthcare Foundation (AHF) officials expressed opposition to the merger.3
“Allowing one company to control both ends of the service spectrum for a person with HIV interferes with patients’ control over their treatment, eliminates choice by reducing competition, and will likely increase prices,” Donna Tempesta, CPA, Vice President of Northern Region and Finance for AIDS Healthcare Foundation, said in a statement.3“For these reasons, AHF has significant concerns about the merger.”
National Community Pharmacists Association CEO B. Douglas Hoey, MBA, and American Medical Association President Barbara L McAneny, MD, also previously voiced concerns that the consolidation would raise prescription drug prices and reduce patient access to medications.
“The CVS-Aetna deal is popularly described as a vertical merger involving 2 companies that don’t operate in the same markets,” McAneny said, in a previous press release.4"But in fact, CVS and Aetna do operate as rivals in some of the same markets, raising substantial concerns that are specific to horizontal mergers. A merger of these 2 rivals would risk a substantial reduction of competition in the stand-alone Medicare Part D prescription drug plan market and the pharmacy benefit management services market.
Despite blowback from groups who opposed the merger, CVS Health President and CEO Larry J. Merlo said that the combined company will bring an innovative health care model that is easier to use and cost-effective while putting patients at the center of their care.1
“As the front door to quality health care, our combined company will have a community focus, engaging consumers with the care they need when and where they need it, will simplify a complicated system and will help people achieve better health at a lower cost,” Merlo said in the statement.1