If you fill your prescriptions at Target, stay tuned for some big changes. Target’s pharmacy and clinic businesses are being sold to CVS.
CVS, the second-largest drugstore chain in the United States, will pay $1.9 billion to acquire the businesses, which include more than 1,660 pharmacies across 47 states, according to a Target press release.
The businesses will be operated as a store-within-a-store and branded as CVS/pharmacy. The acquisition, which still needs approval from regulators, also includes Target’s 80 in-store health clinics, which will be rebranded as MinuteClinic. CVS said it will open 20 more health clinics in Target stores in the next three years.
“This partnership allows us to help those customers who may define convenience as a one-stop shop, or who may define convenience in a more episodic fashion,” said Larry Merlo, CVS’ chief executive, during a conference call with investors.
Target chief executive Brian Cornell said a pharmacy is “a very complex space in which we’re not positioned to be successful on our own,” according to a Washington Post report. Profits in the pharmacy segment of Target’s business were “modestly negative” last year, he said.
In a Target press release on the deal Cornell said CVS presents an “expert partner” that will be able to offer Target customers “access to proven, best-in-class services.”
After the deal is completed, Target said it plans to expand its wellness offerings, including its natural and organic food selection.
So, what can consumers expect if the CVS deal goes through?
In an FAQ devoted to the CVS deal, Target touted the planned expansion of access to pharmacy services, but didn’t offer any details on pricing for prescriptions.
“Until the deal closes, it’s business as usual for both companies,” Target said. “Following the transition, CVS Health has committed to having a low-cost generic drug option available to Target’s cash-paying guests.”
But consumers could potentially see their prescription prices dip, health care industry analyst Dr. Sumanth Addanki told NBC.
“When you have two big companies like this, their relationship with suppliers and wholesalers is bound to improve,” he added. And hopefully, “they would pass some of those savings along to the consumer.”
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