Report: To Protect a Client and Itself, CVS to Buy Aetna - Page 2

Deal is worth $69B, says source
By Newser Editors and Wire Services
Posted Dec 3, 2017 4:40 PM CST

  • Currently: CVS Health started adding clinics to its drugstores years ago and has been expanding the services they offer. Customers can get physicals, flu shots, treatments for sinus infections, cholesterol screenings, and help monitoring chronic conditions like diabetes. Analysts say clinics aren't especially profitable, but they are important because they draw people into the stores and help build deeper customer relationships. The Aetna deal could fuel a health care services expansion for CVS, with the company deciding to open more clinics or add services such as eye care or hearing aid centers.
  • The Amazon angle I: The clinics also provide services that can't be purchased online. Like other retailers, drugstores are struggling to hold onto customers who are buying more goods through outlets such as Amazon. By expanding its medical services, CVS would essentially be "replacing aisles and products with services," says Jefferies analyst Brian Tanquilut.
  • The Amazon angle II: The deal also will help CVS keep Aetna's business managing the insurer's pharmacy benefits. That could keep millions of customers away from Amazon if the retail giant decides to expand into prescription drugs. Investors have been worried about that prospect since reports about the possibility first appeared earlier this year.
  • Other competition: CVS also has to worry about competition from UnitedHealth Group Inc. The nation's biggest health insurer also manages a large pharmacy benefits business, and it runs doctor practices and clinics.

Antitrust regulators still need to approve the deal, and that is not guaranteed.

(Read more CVS stories.)

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