CVS Lays Out Vision for Future as Aetna Merger Looms
CVS Health
Corp.
executives gave investors a window into their strategy after completing the acquisition of the health insurance company
Aetna
with the aim of becoming a one-stop shop for patients.
The merger CVS-Aetna ̵[ads1]1; which gathers the giant pharmacy chain and pharmacy Benefit Manager with No. 3 health insurance company – needs approval from five more states to complete the agreement. So far, CVS has said that it has received approval from 23 of the 28 states needed. The purchase is expected to close before Thanksgiving.
"We are well down the line with the remaining five" states, the company said in a statement Tuesday.
CVS and Aetna operate largely different companies, with their most direct overlap coming into sales plans under Medicare Prescription Drug Program, known as Part D.
Last month, the Justice Department's antitrust managers removed CVS's nearly $ 70 billion deal to buy Aetna after the companies took steps to ease concerns about reducing competition among Medicare Insurance Plan Providers. Aetna in September agreed to sell its Medicare Part D prescription business, which had about 2.2 million members to
WellCare Health Plans
Inc.
CVS CEO Larry Merlo said during the conversation that the merged company will focus on reducing medical costs by increasing consumer compliance with prescription regimes, expanding its membership base and providing more services through brick and mortar stores. CVS also said that the combination would shut down holes in care, reduce unnecessary emergency visits and move expensive therapies to affordable care areas.
Herr. Merlo said that CVS expects to exceed the original target of removing $ 750 million of corporate expenses and other costs from the combined organization.
For example, the new integrated model will focus on better management of five common chronic disorders, such as diabetes, cardiovascular disease, hypertension, asthma and behavioral health, by integrating pharmacy and medical claims, using the clinical data set approach, and expanding the services available at MinuteClinic to assist in early identification and ongoing management of chronic disease. It also plans to have programs and services that reduce hospitalization.
The company will lead new programs and services through its first concept stores that will be open early in 2019.
"We are hard at work and create a plan to distinguish between CVS Health in these patient trips for the purpose of making them simpler and more personal while providing merchandise more accessible, "Merlo says.
Shares, up 15% over the last 12 months, increased by 4.7% to $ 77.20 in the afternoon trading Tuesday after the company had increased revenue and earnings in the last quarter and continued to see the growth in the number of prescriptions filled in pharmacies.
Woonsocket, RI-based company's third quarter increased by 2.4% to $ 47.3 billion before estimates from analysts. store sales increased by 6.7%, FactSet estimated a 5.4% increase
The company achieved a surplus of $ 1.39 billion, or $ 1.36 a share, up from $ 1.29 billion, or $ 1.26 a share, a year earlier. Excluding items including the cost As per the Aetna agreement, earnings were $ 1.73 per share, in front of the consensus forecast of $ 1.71 per share.
Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com
