US pharmacy chain invests $8 billion in home care for customers

The North American pharmacy chain CVS believes that the future of healthcare is home care for physicians.

The giant announced this week that it will buy Signify Health, which offers home health visits, for $8 billion. Signify brings together 10,000 doctors and clinicians and around 2.5 million patients use its platform.

“This transaction is a significant step in our strategy to improve our delivery of care to consumers,” CVS CEO Karen Lynch said in a call with analysts Tuesday. “We have gained a foundation for future expansion of home health care delivery.”

CVS said the acquisition will help provide more patient care management. CVS will act as a “care coordinator” for patients using Signify, and executives said they are considering how to incorporate CVS clinics, pharmacies and other assets for these patients.

The move is CVS’s latest step away from physical retail and toward healthcare.

Customers have been visiting pharmacies less frequently in recent years and company profits have dropped due to lower prescription drug reimbursement rates.

In response, CVS acquired health insurer Aetna for $69 billion in 2018. It has also closed thousands of stores and added more basic health services elsewhere in recent years.

“Retail is a very competitive sector, where margins are under pressure. By comparison, healthcare is a profitable industry that is growing rapidly,” said Neil Saunders, analyst at GlobalData Retail, in a note to clients.

CVS’s competitors have also been making deals to bolster their healthcare strategies lately. Walgreens recently took a majority stake in CareCentrix, a home healthcare provider, and Amazon last month bought One Medical for $3.9 billion, a membership-based primary healthcare provider.

Amazon also acquired PillPack, an online pharmacy, in 2018 and launched its own digital pharmacy in the United States.