Who CVS Health Owns and Runs
AOC: I actually don’t know how many Americans know this, but CVS Health owns Aetna, the health insurance company, correct?
David Joyner President and CEO of CVS Health: Correct.
AOC: CVS Health, which owns Aetna, also owns Oak Street Health Medical Clinics, correct?
David Joyner President and CEO of CVS Health: Yes, it does.
AOC: In addition to that, they own, of course, CVS Pharmacy, and CVS Health also owns CVS Caremark, the pharmacy benefit manager, which helps negotiate some of these rebates and prescription prices, correct?
David Joyner President and CEO of CVS Health: That’s correct.
AOC on CVS Heath Investor Call – Captive Strategy Example
AOC: I was following one of CVS‘s investor calls where they really laid out quite clearly what this means if you are a patient. This is what’s known as a captive strategy. CVS Health, in the investor call, used the example themselves of a patient known as Kate. Kate has an Aetna health insurance plan right here, which is owned by CVS Health. She then goes to a CVS pharmacy. She’s connected to an Oak Street Health medical clinic. She sees a doctor at Oak Street Health who prescribes her medication. Then she goes to fill that prescription at a CVS pharmacy. So the price Kate pays for that medication is dictated by Aetna, CVS Caremark, and they also own the drug manufacturer Cordavis. Mr. Joyner, this is quite a bit of market concentration. Wouldn’t you agree?
David Joyner President and CEO of CVS Health: No, I wouldn’t agree that it’s market concentration. I would suggest it’s a model that works really well for the consumer.
CVS Health, Aetna health insurance, CVS pharmacy All Benefit
AOC: I think it works very well for CVS Health. In fact, you all said on the call that a fully, you all call it a fully engaged member, it’s great marketing there, fully engaged member unlocks sizable value for payers and CVS health. So Aetna health insurance gets a cut, the CVS pharmacy benefit manager gets a cut, the drug manufacturer gets a cut, and the patient gets screwed. Because whether you’re a blue-blooded capitalist or a card-carrying democratic socialist, I think corporate monopolies are a problem.
