CVS Health (NYSE:CVS) plans to buy health insurer Aetna (NYSE:AET) in a $69 billion merger, according to a report from The New York Times.
The deal comes as companies like Amazon (NSDQ:AMZN), which is reportedly trying to launch into the pharmacy business, are looking to change the way that consumers interact with the healthcare industry.
The chief executives of CVS and Aetna told news outlets that they plan to transform CVS’s pharmacies and clinics into community-based healthcare sites, where people can access care for a more reasonable price compared to a traditional visit to the doctor’s office.
Some critics have expressed concern that a vertical merger between the two companies could leave patients with fewer choices, especially if people with Aetna insurance are forced to go to CVS to fill a prescription or receive care.
Aetna CEO Mark Bertolini told The New York Times in an interview that the 10,000 CVS locations across the country provide a strategic advantage – they are already available and established within communities.
“CVS has the draw,” he said. “People trust their pharmacist.”
“We think of it as creating a new front door to healthcare in American” CVS Health CEO Larry Merlo told the news outlet.
CVS and Aetna have had a business relationship for seven years. According to reports, the two companies have been in talks over a merger for the last two months. Under the terms of the deal, CVS is slated to pay $207 per Aetna share. The companies expect that the merger will close in the second half of 2018, contingent upon approval by shareholders and regulators.
“If they can drive the adoption of the care delivery model, that’s a big deal,” Ana Gupte, a senior healthcare analyst for Leerink Partners, told The New York Times.
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