The Department of Justice has approved the merger of CVS and Aetna
The Department of Justice has approved the $69bn mega merger of health organization CVS with health insurance company, Aetna. The move will make the new business one of the largest drugstore chains in the US, including a major segment in delivering key health plans to consumers across its pharmacy benefit arm.
However, the approval has only been secured on the premise that the business sells its Medical Part D division to a subsidiary of WellCare as planned, which presently supports over two million US consumers.
Additionally, the DOJ has informed Aetna that it must enable WellCare to hire employees who are employed by this division.
In a recent statement, Larry J. Merlo, the chief executive of CVS Health, said that the approval “is an important step towards bringing together the strengths and capabilities of our two companies to improve the consumer health care experience.”
“In our new health care model, we provide people access to more affordable care when, where and how they need it,” he added. “Care will be coordinated among the health care providers, caregivers and their health care teams, leveraging the connectivity CVS will provide.
In 2017, CVS Health amassed $185bn in revenue, supporting more than 90mn customers. Aetna, on the other hand gained close to $60bn in revenue, providing essential health insurance to 22mn US consumers.
- Top 10 healthcare startups 2018
- The October edition of Healthcare Global is live.
- Could the screening process for cardiac drug approval be set to change forever?
However, many are concerned that consumers will be left with less choice and control over their healthcare, as well as higher healthcare costs. The move could also make it increasingly difficult for smaller pharmacy benefit management (PBM) players to gain further traction in the sector.
“This type of consolidation in a market already dominated by a few, powerful players present the very real possibility of reduced competition that harms consumer choice and quality,” George Slover, senior policy counsel for Consumers Union, an advocacy group, has publicly stated.
Consequently, those with Aetna health plans could be shoehorned into solely utilising CVS retail clinics, whilst those uninsured by Aetna could pay higher prices, creating significant issues for consumers.
Healthcare costs continue to rise, with medical spending currently consuming 18% of the US’ gross domestic product, CNBC reports. Medical costs have risen by an average of 5.5% each year since 2007, whilst US economy has grown by just over 3% since 1947.
However, traditional PBM’s are facing rampant competition from the technology sector, who can bring forth newfound solutions to the industry. Amazon’s acquisition of PillPack and its decision to partner with JP Morgan and Berkshire Hathaway sent shockwaves through the healthcare market, leading traditional players to urgently look for ways to remain competitive and find solutions fast in order to cater towards an evolving consumer market.
On the rise: Doktor.se
1. Doktor.se launches as a digital healthcare platform in Sweden in 2016. The company's focus is on the B2B market, with a mission to help members find, book and get access to healthcare services through telehealth and telephone calls.
2. The company offers healthcare services through its app as well as at bricks and mortar clinics. After raising more than €40 million in a funding round in May 2020 to expand its operations both nationally and overseas, CEO and founder Martin Lindman says there are plans to enter new markets at the beginning of 2021.
3. Belgium becomes the fifth market where Doktor.se provides telemedicine, through Belgium's communications company Proximus Group. It becomes the second most downloaded doctor app in Europe, and over 1.2 million patient consultations are carried out, either through the app or at physical clinics in Sweden. Throughout 2020 it administers over 250,000 COVID-19 antibody tests in Sweden.
4. Doktor.se is the most popular digital healthcare in Sweden, used by approximately one-tenth of the country's population. New funds are raised to offer improved services for mental health and chronic illnesses, and to expand digital services and acquire physical services to integrate into its digital platforms with the aim of creating a hybrid model.
5. The company announces €29.5 million in funding from Chinese technology multinational Tencent Holdings. Doktor.se say the funds will be used to make its global healthcare services more efficient, accessible and affordable.
The platform now employs nurses, doctors and specialist doctors, psychologists, and physiotherapists, and is available across Europe and in Brazil.
6. Over 1.5 million people are currently using healthcare apps developed by Doktor.se, either run by the company or through its SaaS licensing business. There are around 900 people employed by the company, and Doktor.se say that the productivity of medical staff using the platform is up to four times greater than those working in traditional services.