Amazon is ‘scaring’ CVS, says former Aetna CEO

There are three issues which can be triggering the CVS-Aetna deal and one in every of them is Amazon, former Aetna CEO John Rowe instructed CNBC on Monday.

CVS Health will purchase Aetna for about $69 billion in money and inventory, the 2 firms introduced on Sunday.

The deal would mix CVS’ pharmacy enterprise and pharmacy-benefit-manager platform (PBM) with Aetna’s insurance coverage enterprise.

“Each of those firms are attempting to extend their footprint in well being care,” Rowe mentioned in an interview with “Closing Bell.”

The deal comes as ecommerce big Amazon seems to be to enter the business, holding preliminary talks with generic-drug makers.

“It is not fairly specific but what they’re planning on doing however no matter it’s, it is scaring CVS,” Rowe mentioned about Amazon.

One other factor spurring the deal is United Healthcare, which “has had some success with their built-in mannequin of a payer supplier,” he added.

Lastly, he thinks the failure of current horizontal mergers, like Aetna-Humana deal, has compelled firms to assume extra vertically throughout sectors to extend their footprint.

The CEOs of Aetna and CVS each instructed CNBC on Monday that the merger will reduce health-care costs for consumers immediately.

Rowe believes there are two areas that may see prices decreased — on the level of care at CVS Minute Clinics and in premiums.

“The infusion of tens of millions of Aetna members into CVS program goes to present them extra leverage with the drug wholesalers,” he mentioned.

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