(Photo: M. Spencer Green/AP)
CVS Health Corp. said it's making "good progress" on getting regulatory approval for its $68 billion deal to buy health insurer Aetna Inc. — one of two megamergers in the health care industry that are under antitrust scrutiny.
In the meantime, the drug retail giant has suspended its share buyback plan. The company, one of the U.S.'s leading providers of drug-benefits for employers and health plans, also signaled that some employers may be waiting to see how the sector will be reshaped before making major decisions on contracts that typically last three years.
"There is a bit of a wait and see approach as to how does the landscape shake out," CVS Chief Executive Officer Larry Merlo told analysts on the company's earnings conference call Wednesday.
The shares fell 3.4% to $65.72 at 12:04 p.m. Pharmacy-benefit rival Express Scripts Holding Co., which is being bought by Cigna Corp., also fell, by 1.1%, while Walgreens Boots Alliance Inc. declined 2.8%.
'Moderately Lower'
Opportunities for potential new contracts — so-called requests for proposal — are "moderately lower" than previous years, but it's "difficult to say" whether M&A or other factors are driving the trend, CVS spokeswoman Carolyn Castel said in an email.
"That said, the selling season is still very active," she added.
