CVS CEO Says Amazon Isn’t Keeping Him Up At Night

While CVS Health CEO Larry Merlo doesn’t lie awake at night worrying about Amazon, he admitted his company is making sure there isn’t any room for disruption.

How does he do that? In a recent interview, he said the company spends a lot of time listening to customers to understand what they’re unhappy about, as well as filling any unmet needs.

“So that’s what we focus on as an organization, with the goal being: Don’t leave any white space for Amazon to disrupt,” Merlo said, according to CNBC.

Amazon entered into the prescription drug delivery business through its $1 billion acquisition of online pharmacy company PillPack, which took about $12.8 billion in market value from drugstores CVS, Walgreens and Rite Aid.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” said Jeff Wilke, CEO of worldwide consumer at Amazon, at the time. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

PillPack delivers medications in pre-sorted packaging, coordinates refills and renewals and ensures shipments are sent on time. Merlo called it a “very niche product,” since it’s designed for people who take multiple daily prescriptions.

For its part, CVS offers a similar product that uses a proprietary dosing schedule technology.

“We have that capability today,” Merlo said. “And listen, with the acquisition of PillPack, there’s nothing proprietary about their technology. It’s off the shelf.”

CVS has also made its own moves in the health industry, with the roughly $69 billion acquisition of health insurer Aetna. If approved, the deal would merge the largest pharmacy benefits manager and operator in the nation with one of the country’s longest-living health insurance firms.

Last week, the Department of Justice gave the deal preliminary approval, but CVS still needs states’ approval. Merlo said Monday they’re in the “home stretch” of that process.


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