Aetna deal may hinge on antitrust approach under Trump

Aetna deal may hinge on antitrust approach under Trump

It's unlikely that CVS will really transform itself from a pharmacy company to an integrated health care company, says Martin Gaynor, a professor of economics at Carnegie Mellon University. CVS Health Corp. will pay about $207 in cash and stock for each share of Aetna Inc.

Aetna shares were trading at $184.84 at 6:33 a.m.in NY, well below CVS' $207-a-share offer for the company - a sign investors are skeptical the deal will close at the current price. The evolution won't happen overnight, but in time, shoppers may find more clinics in CVS stores and more services they can receive through the network of almost 10,000 locations that the company has built.

"I think over time you're going to see less of that front-store retail and more health care services in their stores", said Jeff Jonas, a portfolio manager for Gabelli Funds who follows drugstores.

The pharmaceutical chain revealed on Sunday that it had inked a deal with Aetna in order to combine its drugstore business with one of the largest health insurers in the U.S. "It's the overall outcome for the patient", Aetna CEO Mark Bertolini told Reuters in an interview.

"Aetna has a talented and dedicated group of employees working to build a healthier world every day".

"Delrahim was very clear in his concerns about behavioral decrees and then put his money where his mouth is when he brought the AT&T case", Kully said. "This is the next step in our journey, positioning the combined company to dramatically further empower consumers". A merged CVS-Aetna "can meet an unmet need in terms of improving access and reducing cost and helping people achieve their best health". Expect that trend to continue as the drugstore switches more from selling products in its stores to services that can't be bought online, where retailers face formidable competition from the likes of Amazon. Gradually, CVS added services like blood draws or monitoring of chronic conditions such as high blood pressure and diabetes.

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Health insurers meanwhile have sought to cut costs amid steep prescription drug price rises and requirements to care for even the sickest patients under the Affordable Care Act.

The FTC has typically handled mergers of retail businesses like CVS.

CVS has more than 9,700 pharmacies and 1,100 Minute Clinics, walk-in locations that offer vaccinations, lab tests and diagnosis and treatment of illnesses like strep throat and ear infections from nurse practitioners and physician assistants. Over time, a bulked-up CVS may gain more negotiating leverage over prices, but it is hard the say how much would trickle down to customers.

Analysts have said the CVS-Aetna deal could prompt other healthcare sector mega-mergers, as rivals scramble to emulate the strategy.

The only pricier deals involving companies based our six-state region were: Bell Atlantic Corp.'s purchase of Conn. -based GTE Corp., which was valued at $71.3 billion and completed in 2000; and Conn. -based Charter Communications Inc.'s purchase of Time Warner Cable Inc., which was valued at $78.4 billion and completed in 2016. Regulators also sued to stop Aetna's proposed $34 billion purchase of Humana Inc. - a deal that fell apart earlier this year.

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