Reuters Insider - Inside the News: CVS Deal May Pressure Humana, UnitedHealth

United Health Products

13/06/2016 11:04

Click the following link to watch video:                              
 https://insider.thomsonreuters.com/link.html?cn=share&cid=176535&shareToken=Mzo4YWQ2NDZlMS04NGQ4LTQxMDktOTViNS05ZWY5ZjdkZTM1YzQ%3D&playerName=ReutersNews 
                                                                       
 Source:             Thomson Reuters                                   
                                                                       
 Description:        Reuters Healthcare Correspondent Lewis Krauskopf  
                     says expect more pressure on the insurance        
                     industry because of the latest CVS deal.          
 
 
(To access all exclusive Reuters Insider programming visit: http://insider.thomsonreuters.com) 
 
 Short Link:  http://reut.rs/1BgziUM  
 
 
Transcript (May be auto-generated)

                 Let's go Inside the News at 10AM. US stocks are down as investors appear poised 
to grab profits after a recent rally. Still the S&P 500 is on track for its best
December performance since 1991. The index has gained 6.6% so far this month. 
Meantime, treasury prices are up sending yields lower. This, as traders bought 
longer-dated debt in an effort to square up their books. Bond market closing at 
2PM Eastern today. Universal American shares are surging 36% after it said it's 
selling its Medicare prescription drug business to CVS Caremark for about $1.25 
billion. Reuters Healthcare Correspondent Lewis Krauskopf says the deal is going
to put pressure on others in the insurance industry. Lewis, why is CVS wanting 
to do this deal and why now? Well it's really making them a much more formidable
competitor in the Medicare business, the Medicare Part D business in which they 
offer prescription drug coverage under Medicare, which is the government program
for the elderly. And this is, it's going to more than double their membership to
over 3 million. And that will really make them a more formidable competitor 
against the likes of Humana and UnitedHealth, which are sort of the titans in 
this space and which have been bulking up themselves. Humana did a deal earlier 
this year with WalMart to make a, to provide a more substantial offering in the 
Medicare Part D space. It's also coming at a time when the post-war baby boom 
mediation is aging in to Medicare. So there's going to be more growth in 
Medicare over time, so that will position CVS a lot better. This is also a 
population that goes to the drugstores and so there's the possibility, analysts 
are saying that this will really help CVS capture more foot traffic in their 
retail stores. Lewis, thanks for that. Shares of IMAX jumping about 12% this 
hour. 

This comes on a report that Sony is considering a $40-a-share bid for the big 
screen movie company. That would be a total price tag of about $2.5 billion. The
UK's Daily Mail says Walt Disney may be interested as well. Euro's edging up to 
a two-week high against the Dollar. The common currency is holding just above 
its 100-day moving average on year-end buying by central banks. Analysts are not
favoring the Euro going forward. It's lost nearly 7% against the Dollar and over
18% against the Yen this year. Meantime, Estonia becomes the latest member of 
the Euro Club when it joins on January 1. 

In about half an hour, we get the latest read on the Economic Cycle Research 
Institute's Leading Economic Index. The measure of future US growth expanded at 
an annualized rate of 0.8% last week, that was at a 30-week high after hitting a
trough in August. Reuters Specialist Editor Dan Burns says based on historical 
data, 2011 growth might surprise to the upside. Coming up at 1030, find out why 
more prosperity does not necessarily lead to democracy, that's what MIT 
Professor of Economics Daron Acemoglu is saying. And at 1100 EST, Reuters 
Equities Analyst John Kozey tells us his best and worst share picks for the 
year. I'm Rhonda Schaffler, this is Reuters Insider