Dan Mendelson's Expectations for Cross-Sector Mergers Like CVS, Aetna

The value of these mergers will really be dependent on how rapidly and effectively they can change the retail pharmacy setting, said Dan Mendelson, MPP, founder, Avalere Health.

TranscriptWhat concerns or expectations do you have for cross-sector mergers like the one between CVS and Aetna?

I think that the value of these mergers will really be dependent on how rapidly and effectively they can change the retail pharmacy setting. The retail pharmacy setting right now, as I said, is not one that is conducive to profitability. It also has so much potential, because the reality is patients trust their pharmacists more than they trust their doctors, more than they trust pretty much anybody else, certainly more than they trust the pharmaceutical company. So, when you look at trust, pharmacists, they rank up there.

So, it’s a setting in which you have a really trusted healthcare professional and pharmacists are really not being fully deployed. The other thing that I think holds a lot of potential is the ability to deliver data at the pharmacy level. The pharmacist should know more about the patient. The pharmacist should know, for example, whether the patient needs a mammogram or not, or whether the patient has gone in to have his cholesterol checked or whether the patient has had a colonoscopy, if the patient needs one.

Right now, the pharmacist doesn’t know that, so getting data, information, and really the ability to engage with patients to the pharmacy counter can really improve the value of what is being delivered in that setting. So, I think that as I look at the combinations, at the business combinations, their ability to really change and leverage in those kinds of value propositions will determine how effective they are.