- Anthem submitted a court filing arguing that a federal judge’s ruling blocking Aetna’s planned $37 billion acquisition of Humana validates its claim that $2.4 billion in medical cost savings it says will be passed through to consumers should overcome anticompetitive harms.
- U.S. District Judge John Bates blocked the proposed megamerger of Aetna and Humana, saying their “proffered efficiencies” didn’t outweigh the anticompetitive effects of the union.
- Shares of both Anthem and Cigna rose Wednesday — up 2.32% and 1.39%, respectively — buoyed by investor confidence despite continued legal challenges to their $54.4 billion merger, Yahoo Finance reports.
Sources recently told the New York Post the federal judge overseeing the Anthem-Cigna case is expected to block the deal as well. Anthem indicated it would extend the kill date for its merger with Cigna to April 30, citing the need for more time to complete the transaction. Aetna and Humana are also weighing their options and could appeal the court's ruling.
Attempting to play off of the Aetna-Humana ruling, legal representatives for Anthem wrote in the court ruling, “In Aetna, the Court could not conclude that the efficiencies were verifiable where plaintiffs raised concerns about the reliability of defendants’ ‘best of two contracts’ efficiencies estimates that defendants’ experts failed to ‘wrestle with’ through robust analysis.” Referring to its key economics expert Mark Israel, they added, “But here, Dr. Israel’s analysis overcomes any similar concerns.”
Anthem also took aim at the Justice Department’s claim that there are the U.S. insurance market is dominated by just four large insurers, noting that Bates included Humana as one of the “Big 5” in the insurance market.
Attorneys at the DOJ's antitrust division responded by saying the court ruling in the Aetna-Humana case "reaffirms the basic principle" that "courts will give weight only to efficiencies that are cognizable—i.e., ‘merger-specific efficiencies that have been verified and do not arise from anticompetitive reductions in output or service.’”