CVS AND AETNA GETTING TOGETHER. DOJ Approves CVS-Aetna Deal

 – By Todd Horwitz, Bubba Trading

 

The Justice Department’s approval of the $69 billion merger between CVS Health and Aetna on Wednesday caps a wave of consolidation among giant health care players that could leave American consumers with less control over their medical care and prescription drugs.

The approval marks the close of an era, during which powerful pharmacy benefit managers brokered drug prices among pharmaceutical companies, insurers and employers. But a combined CVS-Aetna may be even more formidable. As the last major free-standing pharmacy manager, CVS Health had revenues of about $185 billion last year, and provided prescription plans to roughly 94 million customers. Aetna, one of the nation’s largest insurers with about $60 billion in revenue last year, covers 22 million people in its health plans.

The two companies say that they will be better able to coordinate care for consumers as the mergers help tighten cost controls. Larry J. Merlo, the chief executive of CVS Health, said in a statement that the approval “is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer health care experience.”

CVS CEO outlined his vision for the combined company in a Sept. 20 speech – a new data-driven health-care model that’s more personal, convenient and tailored to individual patients than ever before.

In combining CVS and Aetna, Merlo said the two companies will create a model that’s “easier to use, less expensive and puts people at the center of their care.
 It’s the latest example of change in a health-care industry bracing for disruption while regulators and consumers demand lower costs. The DOJ recently cleared health insurer Cigna’s acquisition of pharmacy benefits manager Express Scripts.

Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets and Political Commentary

 

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.