Humana and Walgreens Boots Alliance could benefit from expanded investment stakes, according to analysts cited by the Courier Journal.
Here are four things to know:
1. On Nov. 20, sources told The Wall Street Journal the two companies are in early talks about taking equity stakes in each other, and they’re also discussing a wide range of ventures, including one that expands their partnership focused on serving seniors.
2. While it’s not confirmed whether the companies will reach a deal, Jefferies analysts said a larger retail footprint could boost Humana’s “brand and improve its ability to market directly to prospective” consumers, according to the Courier Journal.
3. Jefferies analysts continued: Commercial payers “are evolving their strategies to more directly impact care consumption patterns and, therefore, cost trends,” they said. “However, the pharmacy business model is under more direct attack from disruptive players than are health plans.”
4. A drugstore chain and health insurer partnership could mean cost savings for Humana and lower investment from Walgreens, according to JPMorgan analyst Lisa Gill. “With the equity ownership components giving each company skin in the game, [it increases] incentives to work collaboratively to make the partnership work,” she said, according to the Courier Journal.
Date: November 27, 2018