- CVS Health on Wednesday its deal to acquire the health insurer Aetna has officially been completed.
- The deal, announced in December 2017, forms a new kind of healthcare company that includes the largest retail pharmacy in the US as well as one of the largest insurance companies.
- The combined company is already shaping to change the healthcare system as we know it.
Almost a year after it was announced, CVS Health has officially on its deal to acquire the health insurer Aetna.
The two companies got the go-ahead from the Department of Justice for their deal in October, but they still needed key state insurance agencies to sign off. CVS Health on Monday morning said the two companies had received approval from all regulators and expected to complete the transaction by Wednesday.
CVS said Wednesday that the transaction values Aetna at $212 a share, or $70 billion. All-in, including Aetna’s debt, the total value of the deal is $78 billion.
As part of the deal closing, the state of New York imposed certain conditions to CVS geared at protecting consumers, including not allowing the transaction to be paid for by Aetna companies covering New Yorkers as well as committing $40 million to the state to support health-insurance education efforts.
The deal will redraw the healthcare industry.
In CVS and Aetna’s case, the deal creates a new type of company consisting of a health insurer, a retail pharmacy, and a company that negotiates prescription-drug prices with drugmakers. As part of the agreement with the DOJ, CVS and Aetna have to divest Aetna’s Medicare Part D prescription-drug-plan business.
The boundaries of the healthcare business are changing. Instead of growing by acquiring other companies in the same business, companies have started to move into new lines of business, with no two combinations looking exactly the same.
It’s part of a push by healthcare companies to both cut costs and gain more control over the patients in need of their services. It’s coming as large tech companies seek ways to disrupt the healthcare industry and as new medications challenge the way we pay for treatments.
Already, CVS is getting creative in how it manages consumers’ health. CVS said in its earnings announcement in November that it planned to expand the health services offered at its pharmacies so it could manage more chronic conditions such as diabetes and heart disease.
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