CVS agrees to buy Aetna for $69 billion

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CVS Health (CVS) has plans that reach far beyond filling your prescription.

CVS Health Corp. announced plans Sunday to purchase the health insurance company Aetna Inc. for $67.5 billion, and expects the plans to be finalized in the second half of 2018.

"Consumers have to be concerned about removal of competition in the marketplace", he said.

CVS also recently took over the pharmacy operations at Target.

One of the few areas where the companies directly overlap is in the Medicare drug business. Additionally, we're still unsure if the Affordable Care Act will be replaced. A merged CVS-Aetna "can meet an unmet need in terms of improving access and reducing cost and helping people achieve their best health".

An announcement could come later on Sunday.

Their vision expands beyond capitalizing on CVS' existing MinuteClinic structure, which largely offers preventative services like flu shots, the companies' chief executives said in an interview.

"We're in an environment where health care in general is undergoing a massive amount of transformation ... and you've got nontraditional players like Amazon looking at the health care space", said Jim Winkler, a senior vice president in Aon's health practice.

The mammoth acquisition pairs a company that runs more than 9,700 drugstores with an insurer covering around 22 million people. "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".

The company expects to invest billions of dollars in the coming years to add clinics and services, largely financed by diverting funds away from other planned investments.

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Industry experts say that is less likely to happen with CVS-Aetna due to their minimal direct overlap, historically the main concern for customers. A clinic visit also can be cheaper than a $100 doctor visit for someone who doesn't have insurance, but they have drawbacks.

Photo A CVS Pharmacy store in Manhattan.

Jessy Tatenco, 23, buys household items and over-the-counter medications for his three children at CVS.

So if CVS-Aetna gets the green light from Washington, the way Americans get medical advice may drastically change over the next few years. "They're expanding the retail clinics so they won't be quite urgent care, but they'll resemble a direct primary care facility".

But advocacy groups have criticized the deal. The nation's largest health insurer also runs clinics and doctor's offices.

Gupte added that Amazon's rumored desire to enter into the pharmacy business could be another motivating factor.

The combination of CVS and Aetna aims for something else. The combined companies would have more clout with drugmakers and would aim to bring more health care to consumers in retail clinics.

CVS can help through its home infusion business, which sends nurses to patients' homes to deliver complex drugs for people with hemophilia among other conditions.

"It's really the ideal time", he said. Meanwhile, shares of Aetna were up 1% at $183.18. Last month, however, the Justice Department sued to block just such a "vertical" merger between AT&T and Aetna's approximately $34 billion purchase of rival Humana Inc. - a deal that fell apart earlier this year.

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