CVS Health already has a major influence on the pharmacy sector and it continues to ramp up competition with Walgreens, but now the company is seeking even greater reach over the health care industry. The drugstore retailer reportedly placed a $66 billion bid to buy Aetna, the third-largest health care insurer in the U.S., according to a report from The Wall Street Journal.
While the talks may not lead to a deal, the companies’ respective CEOs — Larry Merlo at CVS and Mark Bertolini at Aetna — have met multiple times over a period of roughly six months, the report said.
A successful deal could push millions of Aetna’s members toward CVS pharmacies, walk-in MinuteClinics and home services for drugs, at a time when retail pharmacy companies are facing stiff competition. The companies are already partners in a contract that runs through 2019, but both are seeking to deliver more transparency to the relationship between pharmacy benefit managers (PBMs) and drug manufacturers.
Consolidation has been a popular route for both pharmacies and insurance providers under pressure from the government and large corporations to lower fast-rising medical costs.PBMs such as CVS negotiate drug benefits for health insurance plans and employers, and in recent years they have taken an increasingly aggressive stance in price negotiations with drug manufacturers.
A merger with Aetna could give CVS more leverage in these price negotiations, but it would also subject it to more antitrust scrutiny. Walgreens and Rite Aid experienced these challenges firsthand when the Federal Trade Commission blocked a…