- A subsidiary of WellCare agreed Wednesday to purchase Aetna's entire standalone Medicare Part D prescription drug coverage, representing 2.2 million covered lives, according to an SEC filing.
- The deal — meant to grease the wheels for approval of the pending CVS-Aetna deal — does not affect individual or group Medicare Advantage plans or Medicare supplement plans or products. Aetna said the purchase price of its Medicare Part D business is not material.
- Aetna's standalone Medicare Part D members will continue to be covered by Aetna through the rest of the year. The deal is expected to close Dec. 31.
Aetna said divesting its entire standalone Medicare Part D business is a "significant step" in completing the Department of Justice's review of its acquisition by CVS.
It was expected that for the deal to move forward, the two companies would have to shed some Medicare Part D plans, analyst have said. Now, analysts with Leerink say they have "increased confidence" that the $69 billion marriage will gain approval from the DOJ following the divestiture.
State regulators had raised concerns about the effects of the merger particularly for Medicare Part D consumers. New York's top financial cop warned regulators in other states that the deal would further concentrate the market, eliminating choices for consumers and driving up prices. Maria Vullo raised her concerns in a letter to Connecticut's insurance regulator, who is holding public hearings on the tie-up.
A similar acquisition deal between Cigna and Express Scripts has already cleared its biggest antitrust hurdle with DOJ approval last week, which was viewed as a positive sign for CVS-Aetna.
CVS and Aetna said in a filing the merger timeline remains unchanged and the deal is expected to close by the end of the year.