CVS announced Sunday that the pharmacy company will attempt to buy health insurer Aetna for a reported $69 billion. If it seems odd that a drug store will soon own one of the biggest health insurance companies in the country, it actually makes sense—because the deal is less about Aetna than it is about Amazon.
From Quartz’s Sarah Todd:
Analysts say CVS snapped up Aetna to stay competitive with Amazon, which has made several moves this year that have pharmaceutical companies atremble. In May, CNBC reported that the company was looking to hire a general manager to develop a strategy for getting into the pharmaceutical business. Then word spread that Amazon had acquired pharmacy licenses in a dozen states. The company said it did so to sell medical supplies, but the move positions Amazon to sell drugs down the line, should it decide it wants to. And just last week, reports circulated that Amazon had held preliminary discussions with generic drugmakers Mylan and Sandoz.
Now, I’ve been saying Amazon healthcare is inevitable for a while. In 2015, after Amazon launched Handmade, an Etsy-style marketplace for independent artists and craft makers, I wrote for Grist: “The ‘everything store’ is becoming literal: The company now provides everything from grocery delivery to original television programming to home services. Need someone to hang that artisanal, handcrafted dream catcher you ordered from Amazon? Well, guess what—Amazon does that too. What’s next—Amazon Healthcare? Amazon College? Amazon Congress? Will we someday be living in the United States of Amazon???” At the time, I was kind of exaggerating: Barack Obama still had a year in office and I figured that President Sanders would get the government back into the business of busting monopolies. Little did I know that President Sanders would remain a DSA pipedream and, two years later, our President would sell his soul (if he had one) for a pat on the head from Jeff Bezos. (My, how things change.) Regardless, Amazon has so much power now that even rumors of Big Pharma buyouts can inspire mergers worth $69 billion. What a time to be alive.
As for how the CVS/Aetna deal will impact consumers, the purchase means CVS could turn the 10,000 pharmacies it operates across the country into “community-based” clinics—which may seem like an ironic term for a massive corporate merger, but makes perfect sense circa 2017: Why have scattered, independently owned doctors offices and pharmacies when you could have 10,000 “community-based” clinics owned by a corporate behemoth and anonymous shareholders who give zero fucks about anything beyond dividend checks? It’s the American dream.
The deal is expected to close in the second half of 2018, as long as the company gets approval from both shareholders and regulators, which, with Trump at the helm and deregulation on the menu, should happen without a hitch.
