CVS CEO: 'We're going to deliver' on what Amazon-JPMorgan-Berkshire deal aspires to do
CVS Health president and CEO Larry Merlo downplayed the threat to its pending $69 billion acquisition of Aetna from the recently announced healthcare partnership between Amazon, JPMorgan Chase and Berkshire Hathaway, saying “what that group aspires to is what we're going to deliver.”
“Think about the fact that we have the infrastructure,” Merlo said on the company’s fourth-quarter earnings call. “We have the assets, we certainly have the health care expertise resident in both companies and we've demonstrated that we can execute on goals and objectives.”
While the announcement of the Amazon partnership initially sent other healthcare stocks tumbling, financial analysts had a more mixed reaction. While some said Amazon’s “disruptive” track record couldn’t be ignored, Moody’s vice president Mickey Chadha said being new to the industry would put them at a disadvantage.
In contrast, Moody’s was bullish about the possibilities of the CVS-Aetna combination, saying it had “the potential to reshape the entire health plan market.”
“Combining Aetna’s membership data, technology and strong Medicare Advantage growth with CVS’s pharmacy operations including minute clinics and prescription drug programs is a compelling combination and could in time lower the overall healthcare costs for consumers,” Chadha told HealthExec when the CVS-Aetna deal was announced.
It’s also possible the two entities will work together. Merlo said the combination with Aetna will be “an open source model” with capabilities that will be “broadly available.”
“So we're looking forward to partnering with all groups of individuals, including this new combination of Berkshire, JPMorgan and Amazon, Merlo said.
Despite the recent request from the U.S. Department of Justice for more information on the merger agreement, Merlo said it’s still on track to be completed in the second half of 2018. The next immediate step is a vote from Aetna and CVS shareholders on the deal, which is scheduled for March 20.
John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.