A federal judge in Washington, D.C., has blocked health insurer Anthem’s proposed $54 billion takeover of rival Cigna, citing antitrust law. The ruling follows a six-week trial that ended Jan. 3.
Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia issued the decision late Wednesday. The judgment comes just two weeks after another judge on the same court made a similar ruling in the planned $37 billion merger of Aetna and Humana.
“Today’s decision is a victory for American consumers,” Acting Assistant Attorney General Brent Snyder of the U.S. Department of Justice’s Antitrust Division, said in an official statement. “This merger would have stifled competition, harming consumers by increasing health insurance prices and slowing innovation aimed at lowering the costs of healthcare,” Snyder added.
The DOJ statement said that Jackson’s ruling is temporarily under seal as the parties review the opinion for confidentiality.
An Anthem spokeswoman said via email Wednesday night that the company was reviewing the decision and would not comment.
Cigna put out a statement shortly after midnight Thursday. “Cigna intends to carefully review the opinion and evaluate its options in accordance with the merger agreement. Cigna remains focused on helping to improve healthcare by delivering value to our customers and clients and expanding our business around the world,” the payer said.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Indianapolis-based Anthem announced its intention to buy Bloomfield, Connecticut-based Cigna in July 2015. That came three weeks after Aetna said it would acquire Humana.
The Justice Department, under the Obama administration, sued in July 2016 to block both transactions, saying that the mergers would reduce the number of large, national private payers from five to three. Eleven states plus D.C. joined the federal suit against Anthem and Cigna, and the trial began in November.
At least one organization applauded the decision.
“Judge Jackson’s findings lay to rest the insurers’ spurious argument that the merger’s anticompetitive effects for consumers will be mitigated by promised efficiencies,” American Medical Association President Dr. Andrew W. Gurman said in a press release.
“The AMA agrees with Judge Jackson’s conclusion that Anthem’s strategy of gaining size to strong-arm physicians would not have benefited consumers. Instead, it would diminish prospects for innovation in healthcare delivery and payment,” Gurman continued.
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