First, the upbeat spin.
- This is a bold move by CVS Caremark with enough positive strategic implications that it overshadowed the otherwise gloomy news from Q2 earnings.
- The contract supports my contention that there will be more PBM consolidation ahead. Scale matters in the PBM business, especially on the eve of major generic launches.
- It’s a great defensive move. Medco was rumored to be wooing Aetna last year, but now must shop elsewhere.
- The size of the deal will relieve pressure on CVS Caremark as it fixes the PBM business.
Plus, CVS Caremark is embarking on a long-overdue consolidation of its multiple PBM platforms while simultaneously ramping up the Aetna business, adding implementation risk.