CVS Health's Big Step in the Health Insurance World: A Bid to Buy Aetna

At more than $200 per share bid, CVS Health is reportedly in negotiations to buy the health insurance giant Aetna. According to The Wall Street Journal, the total deal is worth more than $66 billion.

The merger could mean the 46.7 million Aetna members could access convenient MinuteClinics run by CVS Health in its stores, in addition to the company’s retail pharmacies. It’d also give members the opportunity for improved care coordination.

If the merger is realized, CVS would wield a significant dominance within the healthcare world, being the largest retail pharmacy chain in the United States, a pharmacy benefit manager (PBM), and potentially one of the largest health insurance businesses. However, the 2 companies could face legal roadblocks, considering recent challenges faced by such announcements—a federal judge ruling blocked the Aetna—Humana ($34 billion) and Anthem–Cigna ($54 billion) mergers earlier this year.

"A monopoly of our healthcare system is not good for any American. We are very concerned about CVS Health acquiring Aetna and the adverse impact that this will have on cancer patients," said Ted Okon, MBA, executive director of the Community Oncology Alliance, in an e-mail. "CVS controls the largest PBM, a national chain of pharmacies, a mail order pharmacy, and a medical plan sponsor. As it is, cancer patients experience delays in getting critical therapy, switched treatment without their physicians’ knowledge, and higher medication costs. It will be a disaster if CVS is now allowed to control one of the largest national insurers." Okon worries that the merger will further drive up healthcare costs for average Americans.

For CVS, this deal might also be in preparation for Amazon’s foray into the pharmaceutical business, following rumors last month that the retail giant was talking to mid-size pharmacy benefit managers for contracts.

At market close on Thursday, which was when The Journal posted the news, Aetna shares climbed almost 12% while CVS saw a drop of about 3%.