CVS, DOJ defend marriage as judge remains skeptical
- In court filings submitted Friday, both CVS and the Department of Justice defended the drugstore chain's nearly $70 billion acquisition of Aetna and the settlement agreement the parties reached. Federal Judge Richard Leon has yet to sign off on the settlement after raising questions about whether it goes far enough to protect against anticompetitive concerns.
- In its filing, the DOJ said it initially investigated the merger in the markets where the most harm was likely to occur. The consent decree goes beyond those markets, the DOJ stated, and resulted in Aetna selling off its entire Medicare Part D business, not just in the markets that were likely to see anticompetitive affects. The department said the companies should not remain separate, as Leon has requested, because the part of the company that threatened competition is already separate through the Part D sale to a WellCare subsidiary.
- In a separate filing, CVS argued that the antitrust review process was lengthy and involved approval not just from the DOJ but also from various other state attorneys general.
The filings come before the parties are scheduled to meet for a hearing before the skeptical judge on Tuesday in Washington D.C.
In a rare move, Leon has not signed off on the consent decree the DOJ reached with the companies, citing his concerns over anticompetitive affects of the deal.
Leon expressed reservations over whether the DOJ initially drafted its complaint over the merger "so narrowly as to effectively foreclose my role under the Tunney Act," according to a transcript of a previous hearing.
The judge questioned whether the DOJ's original complaint was so limited that it would make a "mockery" of Leon's approval. Leon pointed to the fact that the settlement addressed only a sliver of the transaction, and characterized it as "one-tenth of one percent," of the $69 billion deal.
Leon requested the two companies remain separate, despite announcing the closing of the deal, until his review is complete.
In separate filings, both CVS and DOJ argued the two should not be forced to remain separate and that the consent decree is in the best interest of the public.
DOJ also argued that Leon only has the ability to accept or reject the consent decree. Citing a previous case, the department said the Tunney Act, or the process of review by a judge, "cannot be interpreted as an authorization for a district judge to assume the role of Attorney General."