CVS Comes Knocking

CVS just announced plans to start a next day delivery service for pharmaceuticals. Chief Executive Larry Merlo announced during CVS’s earnings conference call with analysts. This comes shortly after Amazon had reported that it had wholesale pharmacy licenses in a dozen states a few weeks ago. The next-day delivery service will be available nationwide in 2018, and in some locations, it will even offer same day delivery. Activity has already started with CVS’s new venture, it plans to start delivering medications along with select CVS products in Manhattan starting December 4th.

 

It isn’t hard to deduce that this move by CVS is a direct reaction to Amazon’s moves earlier this year. By getting pharmacy licenses, Amazon was well on its way to begin selling medication online. News of this, had alarming effects across the pharmaceutical business. CVS and Walgreens stock fell following the reports, as well as drug distributors such as Cardinal Health, AmerisourceBergen, and McKesson. Amazon has changed the dynamics of every industry it gains a foothold in, and the same may be true for the pharmaceutical industry. However, with this new report, CVS has launched a preemptive strike, securing its position in the market. But the good news doesn’t stop there for CVS. There have been rumors that CVS is in talks to acquire the health insurance provider, Aetna. If this comes to pass, CVS may grow to be the leading health insurer/pharmaceutical giant in the market. CVS is claiming is place in the market, and unlike many others, it will not be overrun by the tech giant, Amazon.


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