CVS Health, Aetna to merge

CVS Health, Aetna to merge

CVS Health and Aetna on Sunday announced their plan to merge. Woonsocket, R.I.-based CVS Health will be acquiring Aetna, whose headquarters are in Hartford, Conn.,  for roughly $69 billion, or $207 per share. The two companies said that the merger offers the potential to change how patients access care at lower cost.

CVS Health said the combined company — which would offer CVS Health access to the 44.6 million people Aetna serves — would offer new opportunities to reach patients, turning CVS Pharmacy locations in spaces for wellness, clinical and pharmacy services, as well as vision, hearing, nutrition, beauty and medical equipment in addition to its current offerings. It also will offer health services at many locations that will turn CVS Pharmacy stores into a hub for answering patient questions about their conditions, prescriptions and coverage.

“This combination brings together the expertise of two great companies to remake the consumer health care experience,” CVS Health president and CEO Larry Merlo said. “With the analytics of Aetna and CVS Health’s human touch, we will create a healthcare platform built around individuals. We look forward to working with the talented people at Aetna to position the combined company as America’s front door to quality health care, integrating more closely the work of doctors, pharmacists, other healthcare professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers.”

Both companies are expecting the merger to offer a new approach to treating chronic diseases, which costs the healthcare system roughly $245 billion every year. In between doctor visits, patients with diabetes will be able to receive face-to-face counseling at a store-based health hub, as well as remote monitoring of blood glucose levels and other health indicators. Patients also will be able to opt into text message notifications to notify them when their blood glucose is outside of normal ranges. They also can receive medication adherence counseling, buy diabetes-related supplies and receive such ancillary services as weight loss and nutrition counseling. The aim is to improve blood sugar levels and health, the companies said.

The combined company also will have at its fingertips robust data and analytics capabilities that it said could be brought to bear on hospital readmission rates. With 20% of Medicare patients readmitted after discharge, CVS Health noted that a post-discharge medication review, alongside at-home monitoring devices, could help prevent readmissions. Select high-risk patients will be able to access such services as medication evaluations, home monitoring and durable medical equipment at store-based health hubs, the companies said.

“These types of interventions are things that the traditional health care system could be doing, but the traditional health care system lacks the key elements of convenience and coordination that help to engage consumers in their health,” Merlo said. “ That’s what the combination of CVS Health and Aetna will deliver.”

Once the transaction closes, Aetna chairman and CEO Mark Bertolini and three Aetna directors will join the CVS Health board of directors. Aetna’s management team members are said to play a significant role in the combined company, with Aetna operating as a standalone business unit within the CVS Health enterprise.

“This is the next step in our journey, positioning the combined company to dramatically further empower consumers,” Aetna chairman and CEO Mark Bertolini said. “Together with CVS Health, we will better understand our members’ health goals, guide them through the healthcare system and help them achieve their best health. Aetna has a proud tradition of continually innovating to address unmet consumer needs and providing leading products and services to the marketplace.”

Under the terms of the transaction, Aetna shareholders will receive $145 and 0.84 CVS Health shares per share. The total value of the transaction is expected to be $77 billion with the assumption of Aetna’s debt. The companies said the merger could potentially enhance competitive positioning, low mid- to single-digit accretion in the second full year after the deal closes, including $750 million in near-term synergies and a platform to accelerate growth.

The companies expect the transaction to close in the second half of 2018, and is subject to shareholder and regulatory approval.

December 3, 2017

http://www.drugstorenews.com/

December 6, 2017 / Pharma News