CVS Health in addition to Aetna shareholders will vote Tuesday on a deal in which could transform the health-care industry.
In December, CVS announced the idea might buy Aetna for about $69 billion in cash in addition to stock. The deal might combine CVS’ drugstores in addition to pharmacy benefits manager platform with Aetna’s insurance business, blurring traditionally distinct lines in hopes of lowering costs.
The deal comes as both the retail in addition to health-care industries are coming under pressure. Drugstores like CVS are finding a fierce competitor in e-commerce, particularly Amazon, who CNBC has reported to be interested in selling prescription drugs. the idea already sells over-the-counter drugs, including an exclusive line of Perrigo products.
Health-care companies, including insurers, are searching for ways to lower costs. Health spending equals 18 percent of the nation’s gross domestic product, in addition to in which number is usually likely to reach 20 percent by 2025.
Amazon CEO Jeff Bezos, J.P. Morgan CEO Jamie Dimon in addition to Berkshire Hathaway CEO Warren Buffett have even joined the health-care space. They’re partnering to try in addition to tackle the “hungry tapeworm on the American economy,” as Buffett dubbed health-care costs in January.
Since the CVS-Aetna acquisition was announced, grocer Albertsons said the idea might acquire drugstore chain Rite Aid. Pharmacy retailer Walgreens Boots Alliance was reportedly considering buying the rest of the wholesale drug distributor AmerisourceBergen the idea doesn’t already done until talks cooled.
in addition to last week, health insurer Cigna said the idea might acquire pharmacy benefits manger Express Scripts, becoming the latest example of convergence from the sector.
As for CVS in addition to Aetna, the two companies have touted their combination as a way to use CVS’ retail stores to help rein in health-care costs. They’re hoping to get more people into their walk-in clinics at drugstores in addition to keep them out of more expensive sites like emergency rooms.
CVS CEO Larry Merlo in addition to Aetna Chairman in addition to CEO Mark Bertolini told CNBC the deal will reduce costs for consumers immediately.
Within the next year or so, CVS in addition to Aetna expect MinuteClinics to perform about 0 percent of services provided in primary care facilities, up via about 40 to 45 percent today, Thomas Moriarty, CVS’ executive vice president, chief policy in addition to external affairs officer in addition to general counsel told a congressional panel last month.
If shareholders vote in favor of the deal, the idea’ll bring CVS in addition to Aetna closer to finalizing the transaction, though the Department of Justice will still need to sign off on the idea. The agency requested more information via the two companies last month, however CVS’ Merlo said the companies built in which into the timeline in addition to still expect the deal to close from the second half of the year.