CVS Goes Vertical

CVS Health, the parent company of the nationwide pharmacy chain, announced a $10.6B deal yesterday to acquire Oak Street Health, one of the country's largest primary care health networks focused on older adults. The deal is the latest—and CVS Health's first step—in the trend of large pharmacy chains moving into the primary care market.

In addition to nearly 10,000 pharmacies, CVS Health owns insurance giant Aetna, which provides coverage to more than 40 million people under various medical and dental plans. The deal would allow CVS Health to manage health services from the insurer through point-of-care for millions of older patients. Company officials say the move helps meet the government's goal of having more patients in value-based care arrangements—where providers are paid based on health outcomes.

Rivals Walgreens, UnitedHealth, and others have made similar recent moves.