CVS-Aetna Merger Finalized

Posted September 13, 2019 by Megan DiMartino in Uncategorized | 0 comments

We expect to see the ongoing consolidation of our industry stakeholders. The CVS/Aetna plays with the recent CIGNA/ESI deal that also aligns in the integrated medical/Rx delivery model with UHC/Optum. With this alignment between CVS and Aetna and the continued move towards an integrated care model, it is more imperative than ever for employers to carve out their Pharmacy benefit to have maximum disclosure and savings for their drug spend.

– Howard Mazzafro, VP Business Development at Keenan Pharmacy (An AssuredPartners Company)

Dive Brief:

  1. District Court Judge Richard Leon has approved the settlement agreement CVS and Aetna reached with the U.S. Department of Justice to allay antitrust concerns
  2. Leon gave his blessing grudgingly. He had been highly critical of the settlement that called for Aetna to divest its Medicare Part D business to WellCare, noting the agreement addressed just a sliver of the nearly $70 billion deal. His order, however, imposes no further conditions.
  3. The American Medical Association, which argued in court the agreement did not go far enough to address market concentration concerns, spoke out against Wednesday’s ruling.

Dive Insight:

The review by Leon was unprecedented, spanning nearly a year as he decided whether the agreement was in the public interest.

Under federal law, judges have the power to review DOJ settlement agreements and the risk was whether Leon would send the DOJ and CVS-Aetna back to the negotiating table.

“Indeed, if the Tunney Act is to mean anything, it surely must mean that no court should rubberstamp a consent decree approving the merger of ‘one of the largest companies in the United States’ and ‘the nation’s third largest health-insurance company,’ simply because the Government requests it!” Leon wrote in an accompanying opinion.

Leon even held a hearing, letting others besides CVS-Aetna and the DOJ testify on the merits of the merger and the potential harm to competition.

“Obviously we’re disappointed, but I think we’ve established a precedent for the future for the enforcement of the Tunney Act in antitrust cases,” David Balto, a lawyer who testified at the evidentiary hearings on behalf of U.S. PIRG and Consumer Action, told Healthcare Dive. “I think the judge demonstrated why the Tunney Act is important in the oversight of antitrust actions.”

The American Medical Association has been critical of the deal and also had their own experts testify during the hearing.

“Nothing in the deal guarantees reductions on insurance premiums or prescription drug costs. As for promised efficiency savings, that money will likely go straight to CVS’ bottom line. CVS made no commitment to pass much-hyped savings onto consumers through lower premiums or drug costs,” the AMA said in a statement.

CVS, which previously closed on its deal with Aetna, said – “CVS Health and Aetna have been one company since November 2018, and today’s action by the district court makes that 100 percent clear.”

Source: Healthcare Dive | Judge finally blesses CVS-Aetna merger settlement


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

Tags: , , , , , , , , ,

Comments are closed.