CVS (NYSE: CVS) wants to be a health-care company, and is buying a health insurer to prove it.
CVS closed on its $70-billion purchase of health insurer Aetna late last month, after the latter sold off some assets to win antitrust approval from the U.S. Justice Department.
Although it still needs court approval, the deal is considered so transformative that CEO Larry Merlo claims the purchase is likely to change the way health-care is delivered in the United States. It will also make CVS Health one of the nation’s largest health-care companies.
It’s a long way away from where the Woonsocket, Rhode Island-based company started.
Brothers Stanley and Sidney Goldstein, along with partner Ralph Hoagland, opened the first Consumer Value Stores in Lowell, Massachusetts, in 1963. That store sold health and beauty products — but not prescription drugs.
They bought their first pharmacies in 1967, the first of many acquisitions that would build CVS into what it is today. Over the decades, CVS has scooped up small independent pharmacies and regional chains.
All of those deals established CVS as a national retailer. Its 2006 acquisition of a Minnesota chain of walk-in clinics, called MinuteClinic, showed CVS had other ambitions. One year later, in 2007, CVS bought pharmacy benefit manager Caremark for $26.5 billion.
With all the pieces together, CVS hopes to change how consumers access health-care and to lower costs in the process. CVS isn’t giving up on its retail roots, but is diving deeper than ever into health-care.
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