• My view is that it won’t have an impact near term to CVS, but longer term it could be disruptive. I think it will give them a bigger negotiating power over health insurance costs.
• This is not the first time large companies try to form an alliance to resolve this high healthcare cost issue: the Health Transformation Alliance, a group of 40+ large employers, covering 6 million lives, was formed to reduce costs (http://www.htahealth.com/). The group was looking to partner with CVS & Optum to reduce costs.
• Just a reminder that CVS has a higher share of the Medicare Part D scripts, representing 30% of CVS PBM scripts (according to Morgan Stanley), which is more profitable and not targeted by the AMZN/JPM/Berkshire JV. CVS’s Silverscript subsidiary is the #1 PDP insurance company by enrollment with 5.5 million lives as of January 1, 2017, accounting for 22% of total Part D lives. Continue reading “Healthcare comments related to Amazon/JP Morgan/Berkshire news”
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