The Department of Justice is giving the go-ahead for CVS Health and Aetna to merge, as long as the insurer divests its Medicare Part D prescription drug plan business.
The DOJ made the announcement today, signaling the green light for the $69 billion integration of the pharmacy and health benefits business.
Aetna has already said it is divesting its Medicare Part D plans to WellCare Health Plans, a health insurer focused on government-sponsored health plans, including Medicare Part D individual prescription drug plans.
This, said the DOJ, would fully resolve the department's competition concerns.
CVS, the nation's largest retail pharmacy chain, and Aetna, the nation's third-largest health-insurance company, are significant competitors in the sale of Medicare Part D prescription drug plans to individuals, together serving 6.8 million members nationwide, according to the DOJ.
According to the department's complaint, the combination of CVS, which markets its Medicare Part D individual prescription drug plans under the "SilverScript" brand, and Aetna would cause anticompetitive effects, including increased prices, inferior customer service, and decreased innovation in 16 Medicare Part D regions covering 22 states.
The complaint alleges that the loss of competition between CVS and Aetna would result in lower-quality services and increased costs for consumers, the federal government, and ultimately, taxpayers.
Under the terms of the proposed settlement, Aetna must divest its individual prescription drug plan business to WellCare and allow WellCare the opportunity to hire key employees who currently operate the business, the DOJ said.
Aetna must also assist WellCare in operating the business during the transition and in transferring the affected customers through a process regulated by the Centers for Medicare and Medicaid Services.
The Department's Antitrust Division, along with the offices of five state attorneys general, said it filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to enjoin the proposed transaction, along with a proposed settlement that, if approved by the court, would fully resolve the department's competitive concerns. The participating state attorneys general offices represent California, Florida, Hawaii, Mississippi, and Washington.
CVS, headquartered in Woonsocket, Rhode Island, operates the nation's largest retail pharmacy chain, owns a large pharmacy benefit manager called Caremark, and is the nation's second-largest provider of individual prescription drug plans, with approximately 4.8 million members. CVS earned revenues of approximately $185 billion in 2017.
Aetna, headquartered in Hartford, Connecticut, is the nation's third-largest health-insurance company and fourth-largest individual prescription drug plan insurer, with over two million prescription drug plan members. Aetna earned revenues of approximately $60 billion in 2017.
Written concerns are being taken for 60 days.
At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
ON THE RECORD
"Today's settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division. "The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain."