CVS Purchases Target’s Pharmacy Business
In a deal worth almost $2 billion dollars, CVS has purchased all of Target’s pharmacies and clinics. CVS is the largest pharmacy chain in the country, and with the purchase of Target’s pharmacies, they add another 1,700 pharmacies to the chain.
In addition, CVS operates about 1,000 retail medical clinics in 31 states, the largest provider of such services. CVS currently has about 50 percent of the market for retail medical clinics. Its closest competitor, Walgreens, has 24 percent of the market. The company also plans to expand these clinics to the Target locations, which has more than 2,000 stores. CVS sees the walk-in clinics inside other stores as a major area of growth. Since these clinics opened in 2000, millions of people have used them for such things as flu shots, coughs and colds, treatment for problems such as sprains and other minor health complications.
According to studies, these types of clinics are the fastest growing part of primary care delivery. They are only a small percentage of the primary care market right now, but are predicted to grow rapidly. One of the reasons for growth is the lower cost, which averages only about a third of traditional outpatient care.
The consolidation of pharmacies and clinics under CVS will benefit consumers in several ways. One is convenience. With more clinics and pharmacies under one company, more locations and shorter wait times will be available to people.
Another benefit is cost. CVS now offers discounts on certain generic drugs at its pharmacies to people who pay in cash. This feature will also be available at its Target pharmacies. A third benefit is safety. All of these additional pharmacies will be under the CVS brand, which will make it easier for them to share information with regards to medical histories and drug use, lowering the likelihood of unsafe drug interactions.
Despite all of these benefits, there are some potential downsides to the merger. One fairly obvious one is that it will reduce competition for CVS. With less competition, there is the possibility that some drug and medication prices will increase.
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