New Back-to-School Theme: ‘A New Risky Business!’

On the face of it, CVS Health would seem like an attractive investment – an aging Baby Boomer population fueled by healthcare innovations and a tight supply of new healthcare opportunities to fill.

Yet when we look further into CVS’ plans to close 1,600 stores over the next four years, we see a company pivoting into a territory long dominated by traditional pharmacies.

Evidence: In 2016, CVS became the first company in U.S. history to get a license to sell adult tobacco products, raising industry concerns about consumer reactions, which have played out in the past.

Aetna’s decision to ditch this upstart new player is bad news for the entire pharmacy industry, given the plans of pharmacy companies to use their size to get customers into more and more services.

There’s no wonder Walgreens announced this week that it would start work on a $5 billion deal to buy U.S. pharmacy benefits manager, Express Scripts, for about $67 billion.

CVS’s plans to step up into an unfamiliar market are supported by a record amount of low-priced competition among drug-store chains to fill prescriptions and to build out their medical clinics.

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