Physician groups are criticizing a judge’s decision to approve the merger of pharmacy chain CVS Health and health insurer Aetna, saying the deal will raise prices and lower quality.
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Judge Richard J. Leon of the U.S. District Court for the District of Columbia allowed the merger to move forward on Sept. 4, ruling that the acquisition was legal under antitrust law. The merger was approved by the Department of Justice in October 2018 on the condition that Aetna sell its Medicare prescription drug plan (PDP) business to independently owned competitor, WellCare Health Plans. Judge Leon has been examining the government’s plan since late 2018.
In his decision, Judge Leon acknowledged that the merger will have widespread effects for millions of patients and noted the many industry stakeholders, consumer groups, and state regulatory bodies have raised concerns about the merger.
“Although [the opposition] 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,” Judge Leon wrote. “Consequently, the harms to the public interest the [opposition] raised were not sufficiently established to undermine the government’s conclusion to the contrary. As such, for all of the above reasons, I have concluded that the proposed settlement is well ‘within the reaches’ of the public interest and the government’s motion ... should therefore be granted.”
Patrice A. Harris, MD, president for the American Medical Association, said the judge’s decision fails patients and will likely raise prices, lower quality, reduce choice, and stifle innovation.
“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,” Dr. Harris said in a statement. “For patients and employers struggling with recurrent increases to health insurance premiums, out-of-pocket costs, and prescription drug prices, it’s hard to find any upside to a merger that leaves them with fewer choices. Nothing in the deal guarantees reductions on insurance premiums or prescription drug costs. As for promised efficiency savings, that money will likely go straight to CVS’s bottom line.”
Angus Worthing, MD, government affairs committee chair for the American College of Rheumatology, said his group is concerned that the merger will hinder progress that has been made toward creating cost transparency and will make it easier for costs savings to remain secret.
“We hope that regulators will now actively watch the conduct of the merged company to ensure patients are protected,” Dr. Worthing said in a statement.
In a statement, CVS noted that CVS Health and Aetna have been one company since November 2018, stating that the court’s action “makes that 100 percent clear.”
“We remain focused on transforming the consumer health care experience in America,” they said.
CVS Health announced it would buy Aetna for $69 billion in 2017 and finalized the acquisition in 2018. CVS Health President and CEO Larry J. Merlo said the combined company would connect consumers with the powerful health resources of CVS Health in communities across the country and Aetna’s network of providers to help remove barriers to high quality care and build lasting relationships with patients.
Assistant Attorney General Makan Delrahim of the Justice Department’s antitrust division said the agency was pleased with the court’s decision to approve the government’s plan and finalize the merger.
“The divestiture of Aetna’s individual PDP business provides a comprehensive remedy to the harms the Justice Department identified,” Mr. Delrahim said in a statement. “The entry of the final judgment protects seniors and other vulnerable customers of individual PDPs from the anticompetitive effects that would have occurred if CVS and Aetna had merged their individual PDP businesses.”