A federal judge for the District of Columbia ruled on Wednesday that the CVS-Aetna merger that he was reviewing is in the “public interest” thereby removing a final barrier to create a healthcare behemoth.
Judge Richard Leon was probing the merger that the government had approved and there was a chance that he would block the deal, even though CVS formally completed the acquisition of Aetna in November 2018.
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In response to the favorable decision, CVS issued a short statement:
CVS Health and Aetna have been one company since November 2018, and today’s action by the district court makes that 100 percent clear. We remain focused on transforming the consumer health care experience in America.
Opponents of the merger, which included the American Medical Association had argued that Aetna’s divestiture of WellCare — was not enough to alleviate the harm to patients as lack of competition in the marketplace would occur. They argued that WellCare is even a smaller player than Aetna in the prescription drug plan market. However, the judge appeared to be persuaded by CVS’ argument that CMS makes it very easy for people to switch such plans. That was one among several arguments against the union.
Judge Leon concluded:
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Although amici raised substantial concerns that warranted serious consideration, CVS’ s and the Government’s witnesses, when combined with the existing record, persuasively support why the markets at issue are not only very competitive today, but are likely to remain so post-merger. Consequently, the harms to the public interest the amici raised were not sufficiently established to undermine the Government’s conclusion to the contrary
The reaction from opponents of the merger and the government’s consent decree to allow the merger to occur under certain guidelines was swift.
“Despite an unprecedented review that dragged many details of this merger into the light, today’s decision ultimately fails patients, will likely raise prices, lower quality, reduce choice, and stifle innovation,” said Dr. Patrice A. Harris, president, American Medical Association in an emailed statement. “The American people and our health system will not be served well by allowing a merger that combines health insurance giant Aetna Inc. with CVS Health Corporation – the nation’s largest retail pharmacy chain, specialty pharmacy, pharmacy benefit management (PBM) and Medicare Part D Stand-Alone Prescription Drug Plan (PDP) insurer.”
