CVS Health has decided to keep Aetna’s headquarters in Connecticut for at least 10 more years, prompting state officials to rejoice.

In December 2017, the retail pharmacy and healthcare giant announced its intention to merge with Aetna — a managed healthcare company known for their its development of the drug Soliris — and came before a Connecticut Insurance Department panel at a public hearing to defend the deal last Thursday. The company announced its intentions to keep Aetna headquarters along with approximately 5,129 employees in Hartford the day before the hearing.

In a statement on Oct. 3, Gov. Dannel Malloy and Lt. Gov. Nancy Wyman praised the decision as “yet another positive step for Hartford and the capital region, coming on the heels of several major jobs announcements in the past year.”

CVS Health purchased Aetna — a Fortune 500 company with a revenue of around $60 billion in 2017 — for an estimated $69 billion. With CVS ranked seventh among Fortune 500 companies, the deal is among the most momentous in the history of the healthcare industry.

The decision to stay in Connecticut marks a turnaround from last year, when Aetna announced its intentions to relocate its headquarters to New York City in late 2018. The plan involved keeping over 5,000 employees in Hartford while moving around 250 people to the new headquarters.

Gov. Dannel Malloy offered to match the $24 million tax break the move to New York City promised, but Aetna also cited the greater number of resources and bigger hiring pool in its reasoning for the move.

“Hartford is experiencing a transformation with hundreds of new housing units, a major university campus moving downtown, and an arts and culture scene that grows more vibrant each and every day,” Malloy said in a statement in 2017. “It is imperative that we act expeditiously in taking the necessary steps to address our long-term challenges head-on so that we are able to provide predictability for business and taxpayers alike.”

But while CVS’s announcement will keep some jobs in state, the healthcare industry is still seeing a downward trend in employment numbers within Connecticut. According to federal statistics, the number of health industry employees in the Hartford area has decreased from 60,000 in 1990 to 37,000 in 2017.

The repercussions of this trend have reverberated in New Haven. In September 2017, pharmaceutical company Alexion announced its plans to move its headquarters and about 400 employees to Boston from New Haven. Alexion had only moved back to New Haven in early 2016 after 14 years in nearby Cheshire. Company officials attributed the move to the need for a larger hiring pool of biotech researchers. Still, they plan to keep several hundred researchers in approximately 200,000 square feet of their 14-story building on College St., while leasing out the remaining 300,000 square feet.

New Haven Economic Development Administrator Matthew Nemerson SOM ’81 said that it is difficult to estimate the impact that the move had on New Haven. However, he said that the move could have an impact on the high-end rental market and the College Street restaurant scene.

“If you were developing high-end rental apartments nearby, I’m sure [Alexion’s move] caused you to think, ‘Did I just lose 100 possible renters?’” Nemerson said. “But people are still building, and other people are stepping up and [renting] those apartments.”

According to Nemerson, several other companies are considering moves to New Haven from the surrounding suburbs, including Shelton-based energy savings company Budderfly and Guilford-based ultrasound imaging company Butterfly Network, Inc. For employees with families who want to be close to schools and work, “cities make a lot more sense,” Nemerson said.

Still, Executive Director of DataHaven Mark Abraham said that the creation of additional middle-wage and lower-wage jobs, such as those in retail and hospitality, have driven much of the city’s economic growth.

Abraham added that promoting growth in higher-wage jobs in the Elm City is vital to the local economy because higher-paid workers — whose wages tend to go up at a higher rate than low and middle incomes — support many others.

To promote this growth, Abraham said that the city must consider a variety of facets when trying to make New Haven an appealing base for companies.

“Companies all have specific needs, but some of the things in common are access to amenities, proximity to transportation, good office space and the availability of a highly-qualified workforce,” Abraham wrote in an email to the News. “New Haven has a lot of assets in these areas, but so do nearby areas such as Boston, New York City and Stamford.”

Aetna has been headquartered in Hartford since its founding in 1853.

Nathalie Bussemaker | nathalie.bussemaker@yale.edu