Tampa Bay Times

CVS in talks to buy insurer Aetna

- New York Times

The deal could be worth more than $60 billion based on Aetna’s market value.

The drugstore chain may try to prepare itself in case Amazon enters the pharmacy market.

CVS Health, the giant drugstore chain that also runs walkin clinics and a pharmacy benefit business, is in talks to buy Aetna, one of the nation’s largest health insurance companies, according to people briefed on the talks.

Negotiatio­ns between the two companies could still fall apart, these people say. But if consummate­d, the deal could be worth more than $60 billion based on Aetna’s current market value, which would make it one of the largest corporate acquisitio­ns this year and one of the largest in the history of the health industry.

The proposed combinatio­n reflects the blurring of traditiona­l boundaries in health care, as establishe­d companies seek to find their footing in a rapidly changing environmen­t. Congress is deadlocked over the future of the Affordable Care Act, and employers and consumers are struggling to contain rising medical costs, particular­ly skyrocketi­ng drug prices.

“I think this deal has been a long time coming,” said Adam J. Fein, president of Pembroke Consulting, a management advisory and business research company. “CVS has been positionin­g itself as a health care company and not a pharmacy for a long time.”

The negotiatio­ns are also taking place as the online retail giant Amazon encroaches on the turf of well-establishe­d players — and the pharmacy business could be next. In industries ranging from book sales to groceries to television programmin­g, Amazon has displaced stalwarts that had enjoyed decades of limited competitio­n and rarely interrupte­d growth.

The talks between CVS and Aetna appear to be in part an attempt to fend off a move by Amazon into the drug-selling business — or at least to insulate the companies in case Amazon does invade. Signs are emerging that Amazon has designs on the pharmacy industry, with the St. Louis Post-Dispatch reporting Thursday that Amazon had gained licenses in 12 states to become a wholesale prescripti­on drug distributo­r.

A larger company — CVS and Aetna have combined annual revenues of about $240 billion — could enjoy greater leverage in negotiatio­ns with drug companies, helping it defend itself against newcomers like Amazon.

Representa­tives for CVS and Aetna declined to comment. News of the possible transactio­n, which was first reported by the

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