CVS Health, already the nation’s No. 2 pharmacy chain and largest operator of walk-in clinics, is getting larger after agreeing to buy Target Corp.’s pharmacies and clinics for $1.9 billion.
Woonsocket, R.I.-based CVS will change all 1,660 Target pharmacies in 47 states to CVS/pharmacy locations and rebrand the nearly 80 Target Clinics as CVS MinuteClinic.
The deal may make CVS the largest pharmacy chain. According to statistical firm Statista, CVS sold $45.6 billion worth of prescription drugs in the U.S. in 2014, second only to Walgreens, which registered $49 billion in Rx sales. Target had $3.9 billion in prescription sales last year, so the combined entity would be slightly larger than Walgreens.
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CVS operates more than 900 MinuteClinic locations, and Target adds nearly 80 clinics to that total. CVS said it would open as many as 20 new MinuteClinics in the next three years, leading toward the company’s goal of having 1,700 walk-in clinics by the end of 2017.
“By partnering with CVS Health, we will offer our guests industry leading health care services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests,” Target Chairman and CEO Brian Cornell said in a press release.
The two companies also said they would develop five to 10 smaller TargetExpress stores with a CVS pharmacy inside over the next two years.
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This deal, which the companies hope to finalize by the end of the year, continues CVS’ transformation. Last year, CVS Caremark stopped selling tobacco and changed its name to CVS Health.
MinuteClinic is nearing the end of an 18-month transition to an Epic Systems electronic health record to replace a home-grown EHR, providing the IT infrastructure to support rapid expansion of the brand. CVS also joined the CommonWell Health Alliance, an interoperability collaboration ironically seen as a competitive move against Epic by the EHR vendor’s competitors.
In November, CVS opened an innovation lab in Boston. Then, just a month ago, the company announced plans to buy Omnicare, giving CVS a foothold in long-term care facilities.
