Centene Corp.'s recent agreement to buy Wellcare Health plans and create a government-sponsored healthcare giant could have implications for a host of other companies, including CVS Health and Humana, according to Barron's.
The $17.3 billion deal could negatively affect drugmakers, insurers and pharmacy benefit managers, particularly CVS Health — which owns one of the largest PBMs in the nation, according to the report.
As PBM for Wellcare, CVS Health currently gets a cut of $15 billion to $20 billion of Wellcare's annual drug spending. The Centene acquisition would be a major loss for CVS if Centene's PBM, RxAdvance, replaces CVS.
Humana may also be negatively affected, according to Barron's. Humana investors have been upset that the insurer didn't aggressively seek a deal to get more involved in Medicaid. The Centene-WellCare combination has effectively removed two potential Medicaid deal partners and would create a stronger competitor for the health insurer.
Read the full report here.