- Judge Richard Leon of the U.S. District Court for the District of Columbia will preside over a three-day hearing starting June 4 in which he will hear witness testimony from a total of six experts he picked from a pool of potential witnesses submitted by critics of the CVS-Aetna deal and the U.S. Department of Justice.
- Those who oppose the deal, including the American Medical Association, want the judge to consider whether the merger is in the public interest. DOJ had sought to limit their testimony, but Leon denied the request Monday.
- Leon said it is "essential" to understand how pharmacy benefit management services affect Medicare Part D drug plans, which make up the scope of the settlement agreement CVS-Aetna agreed to with DOJ.
DOJ lost its fight to block or limit debate on the the merits of the nearly $70 billion CVS-Aetna merger in Leon's federal district court. The government objected to proposed witness testimony from critics of the deal, including AMA. But in a Monday order, Leon allowed the testimony to go forward.
In its review of the merger, DOJ found the deal would be anticompetitive in 16 Medicare Part D markets across the country and required Aetna divest all of its Medicare Part D business before proceeding with the deal.
DOJ argued testimony relating to anything other than this divestiture, or settlement agreement, is off-limits, but Leon has previously said the settlement addresses only "about one-tenth of 1%" of the megamerger.
The battle in Leon's court room has continued even though CVS has already closed on its acquisition of Aetna.
Leon is tasked with deciding whether the DOJ settlement is in the public interest under the Tunney Act, which gives courts the power to review DOJ decisions. He can't sink the deal, but he can rule that the settlement didn't go far enough to protect consumers.
Critics of the deal, Leon said, have "persuasively argued, in effect, that an assessment of the proposed judgment on the public interest must take into account, among other things, the ways the divestiture remedy may be affected by PBM markets."
Witnesses for those against the deal are Neeraj Sood, Diana Moss and Michael Wohlfeiler. For DOJ and CVS, Leon has picked Alan Lotvin, Terri Swanson and Lawrence Wu.
Sood is a health policy and economics expert and currently teaches at USC Price School of Public Policy and is a founding member the USC Schaeffer Center. Moss is an economist and the president of the American Antitrust Institute. Wohlfeiler is the chief medical officer for the AIDS Healthcare Foundation.
Lotvin is the chief transformation officer at CVS. Swanson is the vice president of Medicare product at Aetna's Part D business. Wu is the president of NERA, a global economic consulting firm.
The hearing is not a trial. There will be no cross examination and there will be no opening and closing arguments, Leon said.
"In short, this hearing is merely an opportunity for the parties and the amici to provide the Court with whatever additional information and analysis they believe will aid the Court in determining whether the Government's proposed final judgment is in the public interest," Leon said in his order.
"This is sure to be a dynamic discussion on whether the proposed merger is in the public interest," AMA said in a statement to Healthcare Dive.
DOJ did not immediately respond to a request for comment.