CVS Health has completed its acquisition of Aetna, finalizing the retailer’s transformation to a health care provider. The total transaction was valued at $78 billion, including the assumption of Aetna’s debt.
Aetna will operate as a stand-alone unit under CVS Health and will continue being led by members of its existing management team, and the Aetna brand name will continue to be used for its health insurance products. CVS Health offerings, including retail pharmacy, will continue being accessible to other health plans, and Aetna members will still be able to use their benefits at other pharmacies.
“Today marks the start of a new day in health care and a transformative moment for our company and our industry,” said Larry J. Merlo, President and CEO of CVS Health in a statement. “By delivering the combined capabilities of our two leading organizations, we will transform the consumer health experience and build healthier communities through a new innovative health care model that is local, easier to use, less expensive and puts consumers at the center of their care.”
Earlier this month, CVS announced plans to open concept stores focused on providing disease management while reducing medical costs. The stores are slated to debut in 2019 and will only be available to CVS customers and Aetna members.
The health care retail space has become highly competitive, and even Amazon is getting involved through its acquisition of PillPack, an online pharmacy startup that delivers medication in time-stamped, pre-sorted dose packaging to help people who manage multiple medications.
CVS is working on improving its own medicine delivery service: 350 CVS stores in the greater Boston area started offering free one- to two-day delivery on most medications and retail purchases in October 2018. The offering is available to CarePass rewards program members and will expand to other regions in the future.
The retailer also has expanded its pharmaceutical offerings by acquiring assets from EntrustRx, the specialty pharmacy unit of Fred’s, for $40 million in May 2018. The deal gave CVS a wider array of holistic pharmaceutical care and therapies.
This growth will help CVS compete with Walgreens, which acquired 1,932 Rite Aid stores, three distribution centers and related inventory for approximately $4.4 billion in September 2017. Walgreens also acquired the pharmacy patient prescription files and related pharmacy of 185 Fred’s stores in 10 Southeastern states in September 2018.