CVS to acquire Caremark Rx

Drug store chain CVS has agreed to acquire pharmacy benefit management firm Caremark Rx for about $21 billion in stock, merging Caremark with PharmaCare, CVS's existing PBM. The deal creates an "integrated pharmacy services provider" with annual revenues of about $75 billion, and should generate about $400 million in operating efficiencies for the two. The new entity, which will be known as CVS/Caremark, should control the dispensing of about a billion prescriptions per year, or more than 25 percent of total U.S. volume. The agreement is expected to face Federal Trade Commission scrutiny, according to the Wall Street Journal.

Though I'm not sure I get how this will actually work, the CVS press release contends that the new company can better help consumers make decisions in a consumer-driven healthcare business (at this stage, I think they're largely going for buzzword compliance). For his part, blogger Tony Chen of HospitalImpact predicts that while the deal won't affect healthcare providers directly, it could help CVS force down pharma company prices (and profit margins), given the combined company's increased market power.

To get more details on the deal:
- read this Wall Street Journal item (sub. req.)
- read this RTT News article


Related Articles:
An analysis of CVS's acquisition of retail clinic chain MinuteClinic. Article
MinuteClinic sets up health data exchange with family physicians. Article
Caremark launches e-prescribing pilot. Article