CVS and Aetna merger a disruptive sign of the future

Published by Healthcare Finance

Two provider organizations have reacted negatively to Wednesday’s announcement by the Department of Justice to allow the merger between CVS Health and Aetna contingent upon Aetna divesting of its Medicare Part D prescription drug plans.

WHY IT MATTERS

Most agree the merger is a sign of the future. The debate is whether consumers will benefit from the data gained by the combination of pharmacy and benefits business, or from lower prescription drug prices.

The American Medical Association has worked to block the deal because it believes the merger is not in the best interest of patients.

ON THE RECORD 

“We now urge the DOJ and state antitrust enforcers to monitor the post-merger effects of the Aetna acquisition by CVS Health on highly concentrated markets in pharmaceutical benefit management services, health insurance, retail pharmacy, and specialty pharmacy,” said AMA President Dr. Barbara McAneny.

The Senior Care Pharmacy Coalition said seniors will be more vulnerable to prescription drug access problems.

“The proposed CVS Health-Aetna merger is emblematic of the growing arms race to consolidate and control consumer access to appropriate prescription drugs, particularly LTC (long-term care) patients,” said Alan Rosenbloom, president and CEO of SCPC. “We are already alarmed by the fact that three market-dominant players – CVS Health, ExpressScripts and United Healthcare – own the three market-dominant PBMs and market-dominant chain pharmacies in the retail, mail order, specialty and LTC markets.”

THE BIGGER TREND 

Healthcare executives are expecting more disruption in the industry, according to Dr. David Friend, a managing director and chief transformation officer at The BDO Center for Healthcare Excellence & Innovation.

Eighty-one percent of executives, clinical leaders and clinicians expect disruptive mergers to continue impacting the industry in the next three years, Friend said. Fifty percent said CVS Aetna specifically would have significant impact, followed by Amazon, rated at 42 percent, Google, 27 percent and Apple, 22 percent.

Jason Andrew, CEO of Limelight Health, said the industry will see  more direct-to-consumer plans from retail outlets.

Michael Meng, CFO at Stellar Health said there was a greater impact when pharmacy companies CVS, Rite Aid and Walgreens, began offering minute clinics or urgent care within stores and when Walmart opened up pharmacies and care centers.

CVS Aetna could be good for consumer’s wallets, Meng said, but he also offered a caveat. “The problem with that is, despite the consolidation in the pharmacy benefit management space in the last 10 years, none of the savings were really passed back to the consumer,” he added.

John Kupice, CEO of H-Source said the combined entities data and distribution network should get the proper prescriptions at the best price to the patients.

“The purchasing power alone of the new entity should reduce costs to patients,” Kupice said.

David Reid, CEO of EaseCentral said this is the new era of big data, of an insurer and retail pharmacy knowing “virtually every detail” about a consumer, from income to prescriptions being taken.

“It’s no wonder insurers are offering to manage employee benefits enrollment for free,” Reid said. “It’s an avenue into full marketing at all levels and obtaining information about individuals that they need only to expand marketing, sales and limit options to those in which they have an economic position.”

Click here to see the original article on the Healthcare Finance website.