Though it’s been a year in the making, CVS Health finally closed today on its acquisition of Aetna, creating a new health-care powerhouse. The merger combines CVS’s pharmacies with Aetna’s insurance business, blurring traditionally distinct lines in hopes of lowering costs for beneficiaries. CVS also has one of the largest pharmacy benefit managers through CVS Caremark and a major Medicare Part D plan sponsor through its SilverScript unit.
The final deal valued Aetna at $212 per share, CVS said in a press release, or about $70 billion, up from previously agreed upon $207 per share, or roughly $69 billion. The two announced the deal in December 2017 and received preliminary approval from the Department of Justice in October. CVS needed final approval from state insurance regulators where Aetna plans are available. A handful of states opposed the combination, saying it would reduce competition and could leave consumers worse off.
In the end, state regulators agreed to sign off on the acquisition. To win approval from California, CVS agreed to a number of conditions, including not raising premiums as a result of acquisition costs and keeping premium increases to a minimum. This came after Aetna said it would sell its Medicare Part D drug plan business to WellCare Health Plans for an undisclosed amount in order to ease concerns about the overlap between the CVS and Aetna Medicare Part D plans.
On its third-quarter earnings call November 6th, CVS said it expects to save more than $750 million within two years of the deal closing. CVS CEO Larry Merlo has promised the combined company will create a new data-driven health-care model that is more personal, convenient and tailored to individual patients than ever before. Learn more about Aetna by giving us a call at 800-962-4693 to see what this means for you and your clients.