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CVS Health, Aetna should integrate while federal court decision is pending, Justice Department says

The DOJ is going against the opinion of federal judge who wants CVS Health and Aetna assets to remain separate.

Susan Morse, Senior Editor

The Department of Justice has determined it will not seek to keep CVS Health and Aetna from integrating while a federal judge determines whether the merger meets antitrust concerns.

The DOJ made the decision in a status report on Sunday, going against the opinion of U.S. District Court Judge Richard Leon, who wants the assets of CVS Health and Aetna to remain separate pending the antitrust Tunney Act proceeding.

CVS Health and Aetna contend they are one company, but the entity said it is complying with Leon's order to submit arguments for the merger by a Friday, Dec. 14 deadline, ahead of a December 18 hearing.

WHY THIS MATTERS

After the merger closed on November 28, CVS Health said the first phase of integration was underway.

The question is whether the court proceeding could interrupt plans. This would delay any efficiencies that the merger might produce, creating unnecessary uncertainty for consumers, employees and shareholders, the DOJ said in its status report.

The Tunney Act empowers the district court to determine whether the merger settlement is in the public interest.

But it does not prohibit companies from consummating their merger and integrating operations while the Tunney Act process is pending, the DOJ said in the status update.

Leon said merger integration should wait until he considered anti-competitive concerns under the Tunney Act .

THE TREND

The Justice Department signed off on the merger pending Aetna's divestiture of its Medicare Part D Plans. The deal closed on November 28 and two days later, Aetna divested of its Part D plans to WellCare.

The court signed the Asset Preservation Stipulation and Order on October 25. According to CVS/Aetna, the order, signed by Judge Leon, allowed the companies to close the transaction. 

ON THE RECORD

"CVS Health and Aetna are one company, and our focus is on transforming the consumer health experience," the company said by statement.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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