Is The New CVS And Aetna Merger A Good Or Bad Thing For Drug Prices?

Oct 17, 2018

A $69 billion merger between CVS and Aetna has been approved by the Department of Justice. This will consolidate the number of prescription drug plans available to consumers in the short-term.

When the DOJ approved the merger between America’s largest pharmacy and third largest health insurance company it required Aetna to sell of its Medicare Part D drug plan.

Some experts are concerned that fewer Medicare Part D providers will lead to a less competitive market. But Juliette Cubanski of Kaiser Family Foundation says once the dust settles, plans offered next year will actually give consumers more options:

“This administration has taken steps to make the Medicare Advantage and Part D more competitive. So on one hand there are mergers happening but then there are new plans entering to balance it out,” Cubanaski said.

Because the merger is between two companies that aren’t competitors it’s hard to tell what the effect will be on drug prices.

It’s also hard to tell because it’s strengthening ties between a health insurance provider and a prescription benefits company who already work together to set drug prices.

“They’re already so large that I’m not sure how much more merging will do to change the bottom line negotiations in rebates and discounts that they’re already pursuing,” Cubanaski said.

Retail giant Amazon is considering entering the drug market. Cubanski says the merger between Aetna and CVS could secure their position in the pharmaceutical industry.

CVS’s CEO Larry J. Merlo says the merger will make healthcare easier to access as the pharmacies offer more diagnostic and preventative care services.