CVS Health and Aetna

CVS (Consumer Value Stores) was founded in 1963 in Lowell, Massachusetts with the establishment of their first retail store. In 1969, it expanded its retail operations to include pharmacy departments in the northeast and was subsequently sold to the Melville Corporation in 1969. Throughout the 1970s, operations expanded with the acquisition of other drug stores. In 1983, they launched a national hemophilia home service, reaching one billion dollars in annual sales in 1985. CVS started a prescription benefit management service, a mail service pharmacy, and other healthcare services. In the 1990s, CVS launched a pharmacy benefit management company for employers and insurance companies. Caremark established CarePatterns, a disease management program. Caremark also entered the multiple sclerosis market. They established the pharmaceutical service as a core operation. In 1999, they launched CVS.com, the first online integrated pharmacy in the United States. In 2000, Minute Clinics, retail health clinics, were established; CVS partnered with them to open three clinics in their chain stores. Minute Clinics became the first to be accredited by the Joint Commission. In 2006, CVS acquired the Minute Clinics. In 2001, CVS/Caremark introduced the Extra Care Card, the first loyalty card for retail pharmacy chains. In 2007, CVS/Caremark and Rx officially merged, creating CVS Caremark. In 2009, the Minute Clinics became affiliated with several healthcare systems nationwide. In 2014, CVS Caremark changed its name to CVS Health. They also removed all tobacco products from their stores. In 2015, CVS acquired all of Target’s pharmacies and clinics. In December 2017, the pharmacy chain, CVS/Caremark, announced their acquisition of Aetna Insurance for $69 billion. According to both companies, consumers will benefit from an integrated, community healthcare experience. Consumers will have access to Aetna’s extensive network of providers with greater consumer access through CVS Health which includes nearly 10,000 CVS Pharmacy locations and more than 1,000 Minute Clinic walk-in clinics (CVS Health).

If this decision was yours to make, what would you have done? Please explain in detail.

Please address the following in providing your solution.

What was the primary strategy of CVS to expand its operations?

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Go to https://cvshealth.com/about/company-history. Scroll down to the history section of the webpage. Identify three strategies that you feel are important to the growth of CVS Health.

Go to https://www.caremark.com/wps/portal/. Go to the bottom of the webpage. Click on the different icons that represent the different areas of CVS health. Summarize the focus of each of the areas and how they contribute to the mission of CVS Health.

Go to https://www.cvshealth.com. Provide a summary of their social responsibility activities.

According to the news release of December 3, 2017, CVS Health announced the execution of a definitive merger agreement under which CVS Health will acquire all outstanding shares of Aetna for a combination of cash and stock. According to the statement and the discussion in the chapter, what type of merger will this transaction be?

How could this transaction affect the hospital industry? Defend your answer.

Perform an Internet search regarding this transaction with Aetna. Based on the information, why do you think CVS Health made this decision?

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