CVS to close 900 more US stores as it looks to Aetna merger

Image copyright Getty Images Image caption CVS is the second-largest pharmacy chain in the US Pharmacy chain CVS will close about 900 of its nearly 14,000 stores in the US, it said Friday. The…

CVS to close 900 more US stores as it looks to Aetna merger

Image copyright Getty Images Image caption CVS is the second-largest pharmacy chain in the US

Pharmacy chain CVS will close about 900 of its nearly 14,000 stores in the US, it said Friday.

The announcement coincides with the company’s move to acquire pharmacy insurer Aetna in a deal worth $69bn (£56bn).

CVS, which is based in California, sells everything from drugstore staples to gym equipment.

It also provides the health care services used at its pharmacies, offering the insurer a blueprint for future value-focused insurance policies.

Uncertainty about healthcare policy in Washington has hurt the sector in recent years, and so too has a slowdown in prescription drug prices.

The acquisition, if approved by US regulators, would give CVS the backing of a major insurer and a large pharmacy benefit manager.

But it would allow CVS to bypass pharmaceutical distribution channels that health insurers have historically used.

“This is a great opportunity to start to reshape our industry,” Dave Denton, chief executive of CVS, said on a conference call with investors.

Earlier this week, Mylan NV raised its offer for rival generic drugmaker Actavis, after US generic drug pricing slowed in the second quarter.

Pharmacy chains and the drug wholesalers that distribute their products have been affected by the consolidation of the healthcare sector since the country’s approval of the Affordable Care Act, created in 2010.

Image copyright Reuters Image caption Insurers in the US have seen their earnings fall over the past few years

Many of the company’s healthcare units are now privately held, and outside of retail, are attracting offers in the $75bn to $100bn range.

Health insurance premiums have also dropped, as a wave of competitors enter the market from big-box retailers and pharmacy benefits managers.

The CVS/Aetna deal “allows us to align our healthcare and retail business models, creating a new form of integrated care that will advance quality, safety and value for our patients, our patients’ families and our sponsors,” Aetna chairman and chief executive Mark Bertolini said in a statement.

Image copyright Getty Images Image caption CVS is looking to sell more services to customers

The deal with Aetna does not include the firm’s pharmacy benefits management unit, which handles the drug plans of insurers and government programmes.

CVS said its network of more than 9,000 pharmacies will grow.

It also remains a dominant retailer, with 88.6% of the retail market share in the US and a large presence in California, Florida, and New York.

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