American Medical Association says CVS-Aetna merger shouldn’t happen

The organization believes the deal would cause an increase in premiums, a reduction in competition in health insurance markets and a rise in drug spending and out-of-pocket costs for consumers.

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The American Medical Association believes regulators should block the proposed merger between CVS and Aetna, according to a news release.

“After very careful consideration over the past months, the AMA has come to the conclusion that this merger would likely substantially lessen competition in many healthcare markets, to the detriment of patients,” AMA president Barbara McAneny said yesterday in a hearing held by the California Department of Insurance, according to a news release. “The AMA is now convinced that the proposed CVS-Aetna merger should be blocked.”

The organization’s decision comes after an analysis of the potential deal, which included insights from academic experts in health policy, antitrust law and health economics.

If the merger goes through, the AMA foresees various problems arising, including an expected increase in premiums, a reduction in competition in health insurance markets and a rise in drug spending and out-of-pocket costs for consumers. It plans to release a detailed memorandum outlining the deal’s negative consequences later this month.

Going forward, the organization will work to persuade regulators to oppose the deal.

Last December, CVS officially announced plans to acquire Aetna after months of speculation. Since then, many have wondered about the deal’s implications on retail clinics, as well as the pharmacy world.

In addition to the consequences it may have, the agreement is interesting for another reason: Insurers aren’t usually fans of provider consolidation, according to Axios. The publication got a preview of a speech Matt Eyles, the president of America’s Health Insurance Plans, gave on June 20. One section illustrates the point about consolidation:

In many local markets, health systems are not only consolidating but also buying up smaller physician practices, until there are no other systems or providers to compete with, and charging more for the same service with just a new logo on the entrance. And that makes it much harder to negotiate for lower prices for patients.

In other CVS news, the retail pharmacy company now offers a prescription delivery option from pharmacy locations across the nation. Patients throughout the country can call their local pharmacy or use the CVS app to have their medications delivered to their home. There is a $4.99 charge for the service. Individuals can also opt to add health items like cold remedies, vitamins and allergy medications to their order.

People in New York City, Boston, Miami, Philadelphia, San Francisco and Washington, D.C. can choose same-day prescription delivery for a one-time cost of $8.99.

Photo: Kuzma, Getty Images