CVS Health Plans to Buy Insurance Company

CVS Health Corp. is in talks to buy United States’ third largest health insurer, Aetna Inc., for a proposed $200 per share or more, amounting to more than $60 billion.

Analysts pointed out that such combination that could have CVS becoming the first health-care triple threat: a pharmacy, pharmacy benefit manager and an insurer. They added that it could form a “health colossus” that may delve in deeper into the average customer’s life to manage care as well as cut costs.

The deal will merge a health insurer that covers around 22 million people and a company that operates 9,700 drugstores and more than 1,100 walk-in medical clinics.

“It also processes more than a billion prescriptions annually through CVS Caremark, its pharmacy benefits management business. Pharmacy benefit managers run prescription drug plans for employers, government agencies and insurers. They use their large purchasing power to negotiate prices,” a report indicated.

CVS can go different directions when it acquires Aetna, giving the former greater scale to bargain better prices for over-the-counter prescription drugs. The health insurer could reinforce the insurance business through creating ways of offering its insured cheaper copayments, probably only in CVS stores. In addition to this, CVS’s vast retail footprint could become a cost effective distribution center.

According to analysts, CVS might have thought that insurers would be an easier target than Amazon. The e-commerce giant has increasingly shown its intent of moving into the business of selling prescription drugs and has been able to easily acquire approval for wholesale pharmacy licenses in at least 12 states.

CVS and Aetna already has a pre-existing relationship, when the 2 signed a contract to work together in 2010.

Amazon Lessens Seller Fees

Amazon recently told its online businesses that sell non-perishable grocery items on Amazon.com that the fee it charges them on items priced $15 or below will be lessened.

Amazon charged 15 percent on all grocery items before, but said that it will now only charge 8 percent on the lower-priced goods till the next year at the very least.

"To help you list more products and keep prices competitive, we are offering you a limited-time referral fee discount on Grocery products," said an email sent by Amazon to all its concerned business owners. "This fee promotion starts at 12:00 a.m. October 15, 2017 (PST), and will run through 11:59 p.m. October 14, 2018 (PST)."

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