It’s no secret that the healthcare industry is consolidating rapidly. In 2018, Definitive Healthcare tracked 803 mergers and acquisitions (M&As) and 858 affiliation and partnership announcements, and this consolidation trend is not expected to slow anytime soon.
In 2018, there were several key vendor mergers and acquisitions, particularly in the retail pharmacy and pharmacy benefits management space. Read on to review some of the most groundbreaking acquisitions we saw this year:
1. June 2018: Amazon acquires PillPack
E-commerce giant Amazon has entered the online pharmacy market with the acquisition of PillPack, an online pharmacy retailer that pre-sorts and ships medications. Amazon already offers shipping convenience, and now they will be taking the same approach with prescription drugs. Only time will reveal how this acquisition will shake up the market, but we anticipate that this acquisition will benefit patients who seek convenience and door-to-door service and improve care by helping consumers who may forget to pick up their monthly prescriptions at the store or face other barriers to prescription access.
2. November 2018: CVS Health’s acquisition of Aetna finalized
First announced in December 2017, and following Department of Justice approval and stipulations, CVS Health's acquisition of Aetna was finalized nearly a year later in November 2018. By combining Aetna’s health care benefits expertise with its retail pharmacies, clinics, and integrated pharmacy capabilities, CVS Health is looking to improve the health care delivery experience for consumers by expanding offerings at MinuteClinics, offering preventative health screenings and delivering other services.
3. December 2018: Cigna completes merger with Express Scripts
Cigna Corporation, a global health service company and insurer, received regulatory approval and successfully completed its merger with pharmacy benefit manager Express Scripts, effective December 20, 2018.
Cigna and Express Scripts strive to transform the healthcare system by expanding their health service offerings and delivering more choices to consumers. The two companies believe they will be able to take a more personalized approach to care as patients and providers work more closely together.
Spotlight: Walgreens acquisitions and partnerships
Walgreens had an exciting year – acquiring almost 2,000 Rite Aid stores, working with Humana to offer senior-focused services in Kansas City, introducing their Find Care Now digital service to connect patients with local providers, purchasing the pharmacy files of 185 Fred’s Pharmacies, and working with Kroger in an exploratory pilot to launch Home Chef retail meal kits.
These recent partnerships speak of Walgreen’s potential to transform care delivery, and we anticipate that Walgreens will proceed into 2019 with this same momentum – partnering with Microsoft and possibly taking a stake in Humana.
These recent retail pharmacy mergers, acquisitions and partnerships are still fresh, so it is difficult to understand the type of impact they might have on the healthcare industry. Will we see prices rise or fall? Could continuing market consolidation impact IDN revenue by changing patient flow? Will new clinics and urgent care centers open as a result?
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