Almost a year after it was announced, CVS Health is set to close on its deal to acquire health insurer Aetna.
The two companies got the go-ahead from the Department of Justice for their $69 billion deal in October, but still needed key state insurance agencies to sign off. The companies said on Monday morning that they’d received approval from all regulators, and expect to complete the transaction by Wednesday.
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 that includes a health insurer, a retail pharmacy, and a company that negotiates prescription drug prices with drugmakers called a pharmacy benefits manager (PBM). 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 as it faces new medications that challenge the way we pay for treatments.
Already, CVS is getting creative in how it manages consumers health. CVS said in its earnings in November that it plans to expand the health services offered at its pharmacies so that it can manage more chronic conditions like diabetes and heart disease.
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