Why would CVS go out of its way to purchase a healthcare insurance company like Aetna? You might think that this is just the company doing some consolidation to shore up its position in the industry. This is true to some extent, but it is not their only motivation for doing this. Instead, they see it as a necessity to help defend against recent advances made by Amazon to try to creep into their own industry and take away some of their market share.
Drew Madden has been observing these developments for some time from his perch as a healthcare IT entrepreneur. It is essentially his job to keep an eye on developments like this to see how they will shake up the world of information technology in the healthcare space. He tries to capitalize on changes like this, and this has been one of the biggest stories to hit the industry in some time.
CVS did not just purchase Aetna, they also started to make offers such as guaranteed next-day delivery on many of the products that people can purchase from their online store. That was obviously meant as a response to what Amazon is trying to do by moving into the industry. They clearly see Amazon as a threat and want to neutralize that by offering many of the same things that Amazon does in the space.
Given all of this, it is not that surprising that the two have been locking horns in battle in recent days. It is pretty hard to avoid this scenario when they are both aiming for the same customers.
At this point in time, it appears that CVS has reacted to this news about Amazon in much more productive ways than have some of their rivals. It appears that Walgreens, Rite-Aid, and others have been largely caught flat-footed. This leaves them trailing behind and could be a real danger to their business model if they do not pick things up in the very near future. For the time being, CVS is the one who has made the most defensive moves to protect itself.
Visit Drew Madden at https://www.linkedin.com/in/drew-madden-60571620