NEW YORK (CBSNewYork) — Drugstore giant CVS is joining forces with one of America’s largest health insurers.
CVS announced Sunday that it plans to buy Aetna in a blockbuster $69 billion deal that could transform the entire health care industry.
For years, CVS has been working to become a one-stop shop for health care with not just pharmacies but also walk-in clinics.
By joining forces with insurance giant Aetna, CVS says they envision their locations becoming something of a community based medical center that includes “…space for wellness, clinical and pharmacy services” as well as “vision, hearing, nutrition, beauty, and medical equipment.”
“A company like CVS has 10,000 brick and mortar locations. So if you’re an Aetna customer, you can access the health care system through a CVS which a lot of us see around the corner from where we live day to day,” said Zack Cooper, a Yale University professor.
The proposed mega merger comes as the companies face new competitors including Amazon which after expanding beyond basic retail products into groceries started inching into the health care business.
“That made companies like CVS sit up and taken notice,” Cooper said.
Still, the merger needs to be approved by anti-trust regulators who recently put the brakes on AT&T’s $85 billion purchase of Time Warner as well as another health care merger between Anthem and Cigna Corp.
“I think one of the questions is when these two firms come together they might do a better job lowering drug prices, but do they end up passing those drug prices onto consumers? And that’s frankly a question that regulators are going to look at when they scrutinize this transaction,” Cooper said.
In a joint statement, the two companies called this a “natural evolution” as they seek to put the consumer at the center of health care delivery.
Experts say the move could reinvent the way you go to the doctor.
The Medical Society of the State of New York weighed in on the deal Monday morning expressing concern.
They released a statement saying in part, “The front door to health care should be at a physician’s front door not an insurer’s and definitely not a store.”