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Independent physician organization opposes CVS and Aetna merger

Patients would be steered away from their physicians, Association of American Physicians and Surgeons said in letter to AG Jeff Sessions.

Susan Morse, Senior Editor

The Association of American Physicians and Surgeons has added its voice to that of the American Medical Association in opposing the proposed merger between CVS Health and Aetna.

The deal would steer patients to insurance plans and site of care, and away from their physicians, according to AAPS President-elect Marilyn Singleton, MD, wrote in a letter to U.S. Attorney General Jeff Sessions and to Makan Delrahim, the assistant attorney for the General Antitrust Division of the Department of Justice.

WHY IT MATTERS

The Department of Justice is currently considering the proposed $69 billion deal for CVS to buy Aetna, with the industry expecting  approval by the end of the year.

THE BIGGER TREND

Singleton sent the letter days after the DOJ  approved the $67 billion merger between Cigna and pharmacy benefit manager Express Scripts.

Insurers, blocked over the past two years in their proposals for horizontal mergers - Anthem/Cigna and Aetna/Humana - have turned to vertical deals with PBMs to take cost out of the healthcare system. 

About 70 percent of all prescriptions are filled by one of three pharmacy benefit managers, according to AAPS. These are Express Scripts, CVS Caremark and OptumRx, which is owned by UnitedHealth Group and has as its subsidiary the insurer UnitedHealthcare.

The proposed deal for CVS to buy Aetna would  combine the nation's third largest health insurer and the largest national pharmacy chain and its PBM. 

ON THE RECORD 

"This merger is particularly troubling in light of the highly concentrated national market for PBM services and current lack of transparency in drug pricing and PBM contracts," Singleton said.

Patients win when there is a competitive market with independent pharmacies, Singleton added., and diminished competition means patients will see higher insurance premiums. In June, the American Medical Association also urged the DOJ to block the deal over anti-competitive concerns.

The price of a generic prescription jumped from $45 to $241 after CVS took over a Target pharmacy, Singleton added. CVS Caremark drastically cut payment rates to independent pharmacies, sometimes below cost, while inflating payments to its own CVS pharmacies, she said.

"As both CVS and UnitedHealth have large pharmacy benefits businesses that would reap considerable rewards from the stream of prescriptions generated by the doctors at clinics they also own, the companies are intent on managing what type of care patients get and where they go for it."

For instance, Humana is steering its Medicare Advantage enrollees to Walmart primary care clinics and Walmart's Medicare drug plan, she said. Southwest Medical Associates, which is part of OptumCare, stopped covering traditional Medicare patients but is accepting two Medicare Advantage plans, both managed by UnitedHealthcare. 

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

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