What the CVS-Aetna Deal Means for the Future of Health Care

Published Thursday, December 7, 2017
by Carolyn Johnson

Familiar as a corner drugstore, CVS Health actually makes most of its money from one of the most lucrative points along the supply chain as a pharmacy benefit manager, negotiating drug prices for health insurers and employers.

The merger, which would be one of the biggest health-care deals of all time, signals the primacy of those negotiations in the health-care system. 

“This is kind of uncharted territory — a pharmacy benefit manager [PBM] buying a major national health plan. I think it’s a sign of the times,” said Michael Rea, chief executive at Rx Savings Solutions, a company that provides transparency prescription drug tools. “PBMs represented a little-known entity no one knew about not that long ago, and now they’re the controlling piece of the deal to take over a national insurer.”

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