The Antitrust Division of the U.S. Justice Department has approved Cigna’s $52 billion acquisition of Express Scripts, clearing the way for the major health insurer to complete its effort to purchase the pharmacy benefits manager by the end of the year.
Cigna and Express Scripts said in a press release that they have received approval from 16 state insurance departments and are working with regulators in the other states to get the necessary approval.
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The Justice Department’s six-month review found that the merger is “unlikely to result in harm to competition or consumers” due to Cigna’s small nationwide PBM business and the preponderance of other PBMs in the market.
“Quality health care and competitive pricing for health care services and pharmaceutical drugs is critical to U.S. consumers,” Makan Delrahim, an assistant attorney general, said in a statement.
The agency’s decision comes at the end of a six-month investigation to determine whether the the merger would substantially lessen competition in the sales of PBM services or raise the cost of PBM services for other health insurers.
Earlier this year shareholders voted to approve the purchase and the deal overcame a major internal barrier when activist investor Carl Icahn dropped his bid to sink the merger.
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“We are pleased that the Department of Justice has cleared our transaction and that we are another step closer to completing our merger and delivering greater affordability, choice and predictability to our customers and clients as a combined company,” Cigna CEO David Cordani said in a statement.
The approval of the Cigna-Express Scripts deal is also a positive signal for CVS Health’s proposed $69 billion acquisition of health insurance giant Aetna, which was initially announced in December.
Both deals are part of a growing trend of payers looking to diversify business lines and lower costs to head off potential disruption from startups and new entrants to the healthcare market like the Amazon-Berkshire-JPMorgan joint health venture.
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