Deal throws up questions on healthcare costs
Print Edition
CVS Health Corp’s proposed purchase of Aetna Inc will change the way many major US corporations buy health coverage for employees and raise new questions over the cost of those benefits, benefit consultants said.
CVS on Sunday said it planned to buy Aetna for US$69 billion.
Most national companies employing more than 20,000 people keep their prescription drug benefits separate from medical coverage. They believe they are paying less by shopping those contracts around to competitors within each industry.
CVS and Aetna argue that their deal will lower healthcare costs for employees of their large corporate customers, giving the company greater clout to negotiate down drug prices and better manage the use of those medicines.
“It’s the lower overall cost of therapy. It’s not just the drugs. It’s not just the PBM (prescription benefit manager). It’s the overall outcome for the patient,” Aetna CEO Mark Bertolini told Reuters in an interview.
But employers are expected to scrutinize that kind of claim closely, according to benefit consultants in touch with hundreds of large employers.
So far, they are taking a “wait-and-see attitude as to whether there is a direct favorable impact on their pricing” of a CVS-Aetna combination, said Jim Winkler, senior vice president for health at Aon, part of Aon Plc.
Last year, large employers’ concerns over two proposed mergers between health insurers Aetna and Humana Inc and between Anthem Inc and Cigna Corp were a major factor in US antitrust regulators blocking the deals.
Industry experts say that is less likely to happen with CVS-Aetna because of their minimal direct overlap, historically the main concern for customers. “By and large they are in separate places in the value chain, so it’s more of a vertical integration,” said Winkler.
CVS is the No. 2 US provider of prescription drug benefits and competes with larger rival Express Scripts Holding Co. Aetna is the nation’s No. 3 health insurer, competing against UnitedHealth Group Inc, Anthem and Cigna to provide coverage for doctor and hospital visits.
A combined CVS-Aetna will reorder those options, leaving Express Scripts as the only standalone company big enough to easily provide pharmacy benefits to top employers.
Aon’s Winkler expects this will lead large companies to turn to their insurer for pharmacy benefits the same way mid-sized companies have. About 63 percent of large corporations use a separate pharmacy benefit company, consultant Mercer’s 2016 employer survey found.
In scale, CVS and Aetna offer a much bigger pharmacy benefits manager than UnitedHealth, which expanded its OptumRx business with the US$13 billion purchase of Catamaran in 2015.
Anthem in October said it would expand its own pharmacy benefits business, and hired CVS to help do so. That partnership could be thrown into jeopardy by the new Aetna agreement, health industry analysts said.
Insurers say combining the two benefits saves money. Large employers who combine the benefits under one insurer have begun to demand insurers hit a specific dollar figure of medical cost savings per member, per year, said David Dross, national pharmacy practice leader at Mercer, part of Marsh & McLennan Co.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
