CVS-Aetna $69 Billion Merger Announced: Vertical Integration Wave Consolidates PBM Power

CVS Health announced its $69 billion acquisition of health insurer Aetna (with debt, $77 billion total), marking the largest healthcare merger in U.S. history and accelerating vertical integration in pharmacy benefit management. Under the deal, Aetna shareholders would receive $145 in cash plus 0.8378 CVS shares per share, valuing Aetna at approximately $207 per share. The merger combined CVS’s retail pharmacy empire and Caremark PBM with Aetna’s 22 million insured members, creating a healthcare behemoth with over $245 billion in annual revenue. The transaction exemplified how PBMs were consolidating across the healthcare supply chain—owning the pharmacy, the PBM middleman, and the insurance company simultaneously. This vertical integration enabled CVS Caremark to control drug formularies, steer patients to CVS-owned pharmacies, and extract profits at multiple points in the prescription drug supply chain. The merger received DOJ approval in October 2018 after Aetna divested its Medicare Part D business (2.2 million members) to WellCare, addressing concerns that the combined entity would control over 30% of Medicare drug plans. The deal was completed November 28, 2018, joining the Cigna-Express Scripts merger as part of a wave of PBM-insurer consolidation that concentrated market power in three dominant players.