CVS and Aetna merged today and it had many people thinking about what this means for the future of the industry. CVS and Aetna have very different business models, with Aetna being an health insurance provider, and CVS being a pharmaceutical/convenience store, this could mean a whole new business model for the company. It also makes you think about why take this large risk when CVS specifically is largely profitable? My answer is Amazon is rumored to get into the pharmaceutical business and now CVS needs a way to differentiate themselves in the market. What other changes do you think will come of this merger, in the industry, or at CVS itself?
https://www.wsj.com/articles/the-cvs-aetna-gamble-a-health-care-giant-not-built-around-doctors-1512411933
I also think that CVS's main goal of merging with Aetna was to get ahead of Amazon in the market. In addition, I think having a health insurance company inside a pharmaceutical store could be extremely convenient for people. A lot of times if someone is unable to get their prescription they have to call the insurance company and that could take hours of talking on the phone. With CVS and Aetna teaming up, that extra time could be eliminated because Aetna could possibly be right there in the store.
ReplyDeleteIn answer to your question about how will the changes affect CVS--i think you'll see more in store health services provided by the insurer Aetna. Maybe CVS will start to look like those urgent care centers. This goes the opposite way to more competetive health care though. It just moves in the direction of a monopoly in healthcare.
ReplyDeleteI think you make a good point about CVS feeling some pressure for Amazon. I like Erins point a lot, this merger could really help in store wait times and issues that come about through the process of getting our medicine. Amazons entry to the market will somehow be electronically based, this move could help put CVS ahead of the game when/if Amazon enters the market.
ReplyDeleteThis will push people that have Aetna insurance to go to CVS, boosting their revenue, and most likely their profits. This could create a monster pharmacy company, which we have already seen with Walgreens acquiring massive amounts of Rite Aid stores. It will be interesting to see how the industry moves forward from here.
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