Vishnu Lekraj: Late last year, CVS and Aetna announced they were going to merge into a large healthcare services conglomerate. There has been much talk in the market about this new firm, how it will flow, and what the moat implications will be for the company ultimately.
After analyzing the deal and looking at it from the perspective of healthcare servicing in the U.S. moving forward over the next several decades, we believe this company will be a powerful player within this space. We believe it will command a lot of pricing power and a lot of leverage within the market that will give it some cost advantages over its peers, such as the managed-care firms, the PBMs, and retail pharmacies.
We believe the new company will be a powerful player moving forward within the U.S. healthcare market, and it currently makes CVS a great company to own as it's undervalued and has some great competitive advantages.