DOJ sticking with CVS-Aetna merger pact despite negative public comments
- After reading 173 comments from the public — all expressing some opinion about the proposed settlement in the CVS-Aetna merger case — the Department of Justice said its agreement would remain unchanged.
- The feedback reflected a "wide range of views," the DOJ said in a response filed last week in the D.C. District Court. Of the 173 comments, 26 were in support of the settlement, which calls for Aetna to divest its Medicare Part D business, an action that has already occurred and was a critical component in clearing antitrust hurdles.
- The "remedy fully addresses the competitive threat posed by the merger," the DOJ said. WellCare, the firm that acquired the business, will be a "vigorous competitor" and preserve the state of the market that otherwise would have been lost in the merger.
The American Medical Association was one of several organizations to send in public comments critical of the DOJ's settlement with CVS-Aetna in the nearly $70 billion deal. "The nation has learned the hard way that overlooking consolidation in health insurance markets is costly," the group said in its comment.
AMA said the deal raises concerns about whether WellCare will be able to compete as well as Aetna because of its smaller size. "WellCare cannot negotiate the same deep discounts on pharmacy and other inputs costs as Aetna can because of its size," it said.
Various state regulators also submitted their comments and analyses, including Dave Jones, California's Insurance Commissioner. Jones and other state regulators held their own hearings and conducted their own review of the merger's effects on their respective markets.
The blockbuster CVS-Aetna deal is still waiting final approval from D.C. District Court Judge Richard Leon, who has raised concerns about whether the settlement does enough to protect consumers from anticompetitive effects.
"I am concerned that your complaint raises anti-competitive concerns about one-tenth of 1% of this $69 billion deal," Leon said during an earlier hearing, according to a transcript of the court proceedings.
Leon previously ordered the pharmacy chain and payer to operate as separate units until he blesses the union and asked for a firewall between them to prevent the exchange of competitive information.
Still, CVS and Aetna have already closed the deal and CVS CEO Larry Merlo sought to assure investors last month, calling the company already "one."