CVS shares down 30% after Aetna merger
CVS Health’s merger with managed care company Aetna has resulted in lower stock shares and some financial stress, but strategies to reduce unnecessary medical expenses and capitalize on trends like cannabis legalization might ease some of that discomfort, CNBC reported March 21.
CVS shares were at an $82 high last November—just before the pharmacy chain closed its deal with Aetna at the end of the month, according to CNBC. They’ve since dropped around 30 percent, but CEO Larry Merlo doesn’t seem worried.
“As we think about this new company, we’re gonna manage it at an enterprise level,” he told Jim Cramer of “Mad Money.” He said the healthcare industry is “growing at an unsustainable rate,” with around a quarter of spending classifying as wasteful or reducible, and CVS will eventually profit off of reducing medical costs.
“Percentage points are going to matter here,” he said. “Being able to reduce those unnecessary costs, you know, the value created is going to start with a ‘b’ as in ‘billion.’ That’s the opportunity that’s in front of us.”
CVS dropped tobacco products from its shelves five years, ago, losing a major source of income, but Merlo mentioned the chain is exploring offering cannabidiol, or CBD, products in eight states as marijuana legalization rolls out across the U.S. He said it’s “part of the health offering” now and that customers will be looking for CBD products to ease arthritic pain and other discomforts.
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After graduating from Indiana University-Bloomington with a bachelor’s in journalism, Anicka joined TriMed’s Chicago team in 2017 covering cardiology. Close to her heart is long-form journalism, Pilot G-2 pens, dark chocolate and her dog Harper Lee.