- The U.S. Department of Justice is asking CVS Health for more information on their bid to acquire Aetna, the companies said Thursday. The company did not specify what information DOJ is seeking.
- It is a routine request, and not unexpected considering the deal is valued at about $70 billion. In a filing with the Securities and Exchange Commission, CVS said it is cooperating and still expects the deal to close by the end of this year.
- The companies have scheduled a shareholder vote for March 20. An Aetna shareholder, however, has sued to delay the vote, saying the payer gave “materially incomplete and misleading information” in SEC documents.
It’s not exactly a setback for CVS and Aetna, but it’s the start of what could be a difficult review process. The vertical integration the merger represents would have repercussions throughout the healthcare industry, and the DOJ will look for ways it could negatively affect consumers.
When they announced their merger plan in December, the companies said it would fill "an unmet need" and is an opportunity "to redefine access to high-quality care in lower cost, local settings." But some analysts are wary.
"A merger of this size not done right operationally could have a negative impact," Maulik Bhagat, managing director in the healthcare practice at global consultancy firm AArete, told Healthcare Dive recently.
The DOJ under President Barack Obama blocked a couple of horizontal mega-mergers in the payer market – Aetna’s bid to acquire Humana and Anthem’s proposed deal with Cigna. Regulators said the mergers would have led to not enough competition in the Medicare Advantage market, where Aetna is a major player.
If DOJ ultimately approves the deal, it could implement certain restrictions, like banning Aetna from explicitly steering patients to CVS pharmacies.
Earlier this week, Aetna posted strong Q4 numbers, including a 76% net income increase from the year before. CVS will release its earnings report next week.