Mergers, Acquisitions, and Rebates: The Latest Healthcare Shakeups

Walmart is reportedly in early talks with Humana; Aetna says that it will automatically apply pharmacy rebates at the time of drug sales for its fully insured commercial plan members; and the American Antitrust Institute is raising concerns about 2 proposed acquisitions. 
Samantha DiGrande
March 30, 2018
Walmart is Reportedly in Talks With Humana
Walmart is reportedly in early talks with Humana in regard to developing closer ties, with the possibility of an acquisition of Humana by Walmart being discussed. If Walmart were to acquire Humana, the move would signify a strategic shift; Walmart currently has a co-branded Medicare drug plan with Humana that looks to steer patients to Walmart stores for their medicines.

A closer relationship between the organizations could allow Walmart to utilize Humana’s patient population and expand low-level medical services in its pharmacies to help patients avoid emergency department visits.

However, some have noted concerns about the potential partnership or acquisition, stating that Walmart’s focus should be on remaining competitive against another retailer, Amazon, which earlier this year said that it would join forces with Berkshire Hathaway and JP Morgan to form a company aimed at reducing healthcare costs for their respective US employees.

According to The New York Times, Neil Saunders, managing director of retail consultancy GlobalData Retail, sees “considerable” risks for Walmart in entering the healthcare space, “especially at a time when Walmart is grappling with the competitive challenges of a rapidly shifting retail market.”

Another Payer Will Pass on Rebates
In other payer news, Aetna announced this week that it would pass on drug manufacturers’ rebates directly to consumers, replicating a move that US insurer UnitedHealth Group—which owns pharmacy benefit manager (PBM) OptumRx—announced earlier this month. Starting in 2019, Aetna said that it would automatically apply pharmacy rebates at the time of drug sales for its fully insured commercial plan members (an estimated 3 million people).

AAI Raises Concerns About Mergers
Earlier this month, insurance company Cigna announced plans to acquire PBM Express Scripts for $67 billion. This notice came after CVS said it would acquire Aetna for $69 billion. These moves have drawn scrutiny:  the American Antitrust Institute (AAI) urged the Department of Justice (DOJ) to block the proposed merger of Aetna and CVS deal, raising the same concerns it noted when the merger of Express Scripts and Cigna was announced.

In a letter sent to the DOJ this week, AAI wrote, “Assuming both mergers move forward, the 3 large integrated PBM-insurer systems that would dominate the markets would have weak, if any, incentives to compete. This would effectively lock out competition by standalone PBMs, insurers, and other market participants.”

 

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