- The U.S. Department of Justice, 11 states and the District of Columbia filed a brief with the Court of Appeals on Monday in opposition to the appeal recently filed by Anthem seeking to reverse the court decision that blocked its $54 billion merger with Cigna. The appeal was granted a speedy process last month.
- The brief argues that there is "overwhelming evidence – uncontested by Anthem on appeal – demonstrated" that the merger would result in increased prices to consumers, hampered innovation among insurers, as the February preliminary injunction concluded.
- Evidence presented in court also "showed Anthem had no real plan to achieve" the medical cost savings it claimed the combined company would create and these savings "are purely aspirational and cannot justify the proposed merger,” the DOJ states.
The final outcome of this case could set a significant precedent for the future of proposed merger and acquisition plans in the country's health insurance market. And the deal may still stand a chance, especially considering that President Donald Trump's administration's recent actions around healthcare reform have shown a stronger support for insurance companies compared to the previous administration.
However, Cigna's hesitation has continued to grow over the past several months. It filed an appeal brief earlier this month showing support for Anthem's argument that the court blocking of their deal should be overturned. But the merger agreement requires Anthem to be "responsible for developing and leading the antitrust strategy, among other things" so it "controlled the development and presentation to the district court of the evidence and argument supporting the legality of the merger," Cigna's last court filing states.
On Valentine's Day, news of Aetna and Humana mutually agreeing to end their plans for a $37 billion merger after a court ruling blocked theirs too and of Cigna attempting to end its deal with Anthem led many to believe that the uphill battle all four had been facing for over a year was over. All four of these companies are among the "big five" insurers in the nation and if the Anthem-Cigna merger is finalized, the combined company would become the largest insurer. The court decisions found both of the proposed mergers would have a substantially detrimental impact on competition, though the markets of concern differed between the two cases, which were both brought on by the DOJ last year.
The Anthem-Cigna deal would lead to higher prices for consumers, eliminate "competition against each other for national accounts," and hinder innovation efforts in the market, U.S. District Judge Amy Berman Jackson concluded. Anthem contended that any anticompetitive effects of the combined company would be offset by the efficiencies it would generate.
Cigna announced in an SEC filing on Valentine's Day that it had filed a lawsuit against Anthem seeking a declaratory statement that it had "lawfully terminated" the deal, as well as more than $13 billion in damages. But then Anthem's request for a temporary restraining order against Cigna to keep it from terminating it was granted.
Considering that Cigna has not dropped its lawsuit in the Delaware Court of Chancery, the statements made in its latest brief and Anthem's temporary restraining order, whether Cigna is willfully attempting to appeal the court blocking is unclear. The oral argument for the case in the Court of Appeals is set to begin on March 24 and the insurance giants' contractual deadline is April 30.