The CVS-Aetna Merger Isn’t Done Quite Yet. U.S. Judge Believes Anti-Trust Issues Remain

Published on April 7, 2019

Back in October, the U.S. Justice Department approved the merger of CVS and Aetna on the condition that Aetna sell its Medicare prescription drug plan business to WellCare Health Plans, Inc.

Following multiple stages of regulatory approval, there still seems to be one issue troubling the Court–whether approving this merger would violate anti-trust laws, creating more of a harm to the general public than good.

What The $70 Billion Deal Entails

The $70 billion merger between CVS and Aetna aims to provide better managed care, new points of access to the medical system, and healthier communities on a global scale.

#1 –Healthcare Is Changing

There’s no question that with the rapid advancement of technology that the healthcare industry is trying to keep up. Consequently, healthcare companies are trying to secure bigger orders in order to compete:

  1. UnitedHealth, one of the biggest health insurers in the country, already owns a pharmacy benefits manager;
  2. Aetna attempted to merge with its competitor, Humana, but was ultimately blocked by the U.S. Government.

As there is tremendous uncertainty surrounding the way in which healthcare is delivered and paid for in this country, especially when it comes to the Affordable Care Act, companies are looking for new ways to remain relevant.

#2–The Reason for Uncertainty Is Clouded by Amazon Entering Into the Space

While Amazon’s exact role in the healthcare industry is unknown, it still remains one of the primary sources of concern for these bigger companies, as Amazon would seek to bring down costs.

#3 –How This Affects You

Back to the CVS-Aetna deal–CVS already owns a pharmacy benefits manager. For the average consumer, the ways in which we see healthcare in CVS facilities could change drastically. The store would no longer be “product-centric,” but also service-oriented.

The approval of the deal circles around forcing investors and executives to inquire as to whether companies that offer administrative services, distribution, or act as middleman, should be independent.

The Gavel Hasn’t Come Down Yet

However, the U.S. Government isn’t fully convinced that this merger is in the public’s best interest. On Friday, Judge Richard Leon of the U.S. District Court for the District of Columbia expressed his desire to hold a hearing in May to hear from critics regarding the $70 billion deal.

The federal Judge said in a court hearing that this would like take a week to hear arguments from the American Medical Association (AMA) and other opponents of the transaction, including, but not limited to the AIDS Healthcare Foundation, pharmacy, and consumer groups.\

Healthcare is a very high priority for tens of millions of people,” the U.S. District Court Judge said. “This is a matter of great public interest.”

However, the U.S. Justice Department believes any extra hearings to be tedious. Jay Owen, a lawyer for the Justice Department urged Judge Leon to consider avoiding the scheduling of any further hearings, as both sides including critics have filed their arguments with the Court.

The total record is adequate to make a ruling,” said Owen.

Agreeing with Owen, CVS attorney, Enu Mainigi, also believes the Court has all the necessary documents on record to make a ruling in addition to considering whether the disclosed witnesses are appropriate for presentation.

Andrew "Drew" Rossow is a former contract editor at Grit Daily.

Read more

More GD News