There are three things that are triggering the CVS-Aetna deal and one of them is Amazon, former Aetna CEO John Rowe told CNBC on Monday.
CVS Health will acquire Aetna for about $69 billion in cash and stock, the two companies announced on Sunday.
The deal would combine CVS' pharmacy business and pharmacy-benefit-manager platform (PBM) with Aetna's insurance business.
"Both of these companies are trying to increase their footprint in health care," Rowe said in an interview with "Closing Bell."
The deal comes as ecommerce giant Amazon looks to enter the industry, holding preliminary talks with generic-drug makers.
"It's not quite explicit yet what they're planning on doing but whatever it is, it's scaring CVS," Rowe said about Amazon.
Another thing spurring the deal is United Healthcare, which "has had some success with their integrated model of a payer provider," he added.
Lastly, he thinks the failure of recent horizontal mergers, like Aetna-Humana deal, has forced companies to think more vertically across sectors to increase their footprint.
The CEOs of Aetna and CVS both told CNBC on Monday that the merger will reduce health-care costs for consumers immediately.
Rowe believes there are two areas that will see costs reduced — at the point of care at CVS Minute Clinics and in premiums.
"The infusion of millions of Aetna members into CVS program is going to give them more leverage with the drug wholesalers," he said.