CVS-Aetna Merger: Benefiting Consumers’ Health, If Not Their Pocketbooks

In October 2018, the Justice Department gave preliminary approval for the merger of CVS Heath, a multi-billion dollar pharmacy company, and Aetna, one of the nation’s largest health insurers, two giants in a field that is rapidly consolidating.1 Both companies maintain that the merger will reduce costs and inefficiencies, but outside groups have concerns about its anticompetitive nature: the Justice Department went so far as to require that Aetna divest all of its Medicare Part D (prescription drug) plans before it would approve the merger.[1] What does this mean for us, as health care consumers? The merger does align the objectives of CVS Health and Aetna with increasing patient health, most notably in creating incentives to reach Aetna customers before their health necessitates a visit to the hospital or another high cost site of care. However, the increased concentration in the pharmacy benefit management (PBM) industry and the anticompetitive effects of vertical integration in the health care industry could wipe out any cost savings for Aetna customers, and could even increase health care spending for consumers as a whole. So, even though the merger could actually benefit Aetna customers’ health, our pocketbooks might not appreciate it.