December 4, 2017
CVS and Aetna have formalized a merger agreement with CVS set to acquire Aetna for roughly $69 Billion dollars. In deals of this nature, approval hinges on one thing: consumer good. The Department of Justice evaluates mergers of this magnitude to ensure benefit not just to the corporations, but to the consumers. In healthcare deals, this typically means they ensure that the big don’t simply get bigger in an already expensive industry. This leads to two key questions defining success in this deal: what, if any, cost savings will customers receive? Will customers be restricted to the CVS network for pharmacy and retail clinics, or will choice be preserved (without financial penalty, such as out-of-network rates)?
As tech giants like Google, Salesforce, IBM, and Apple have begun to disrupt healthcare, existing industry giants are nervously trying to react and diversify their offerings. As an example, earlier in the year, United acquired the Advisory Board Company putting them closer to owning the full value stream in healthcare. CVS and Aetna are joining more healthcare organizations seeking to extend their offerings in an attempt to own the end-to-end of healthcare customers’ journeys.
What it Means
Pharmacy and PBM is ripe for disruption, but maybe not by CVS
Whomever can deliver true consumer good first will win in the pharmacy and PBM space. CVS and Aetna have a tough road ahead proving their deal will benefit consumers. This industry is stuck with experiences that lack the hallmarks of good customer experience: ease, effectiveness, and emotion. It’s time to kill the long lines, awkwardly stapled paper bags with drug literature written above most consumers’ reading level, and inconsistent and rising drug costs. While other industries may fear the Amazon effect, this sector would benefit from the entrance of price competition from the likes of Amazon, a company that excels at fulfillment and shipping services as well as a data driven, personalized shopping experience.
September 5, 2017
- age of the customer
- B2C marketing
- customer experience
- digital business
- mergers & acquisitions (M&As)