In June, CVS Health agreed to buy Target’s pharmacy and clinic businesses in a $1.9 billion deal. It’s a big deal. But there’s an even bigger picture.
Retailers creating a revolution
Analysts see the CVS/Target acquisition as part of a larger trend. Retailers including drug stores, grocery stores and general merchandise stores are taking advantage of the changing financial picture in health care. As consumers demand lower costs and greater convenience, retail companies are building a revolution in the way that care is delivered.
CVS acquisition of Target accomplishes two goals:
- CVS expands its vision of becoming a national integrated health care provider, solidified by exiting tobacco sales and its rebrand to CVS Health
- CVS expands its retail footprint
Based on changing consumer preferences and driven by new demand for health care because of the Affordable Care Act (ACA), retailers are making big bets in health care. Target, CVS, Rite Aid, Wal-Mart, Walgreens and even Whole Foods are just a few of the retailers expanding clinical health care in some form.
Prime does not anticipate this acquisition to cause any network disruption for members.
We continue to believe that the Prime + Blue model offers clients and consumers unsurpassed value both in overall cost of care and superior clinical outcomes. Prime will continue to monitor the progress of this acquisition.