Judge orders DOJ to continue CVS-Aetna review despite government shutdown
- The district court judge who will ultimately decide whether to approve the merger agreement between the U.S. Department of Justice and CVS-Aetna on Friday denied DOJ's request to delay responses to public comments on the tie-up despite the ongoing federal government shutdown. D.C. District Court Judge Richard Leon dismissed the need for a pause and ordered the department to "roll up their sleeves" and file its responses to public comments by Feb. 15.
- Leon said DOJ's warning last week about a possible delay was "surprising" given the department's earlier arguments that slowing down approval of the CVS-Aetna merger could delay any efficiencies and would create uncertainty for shareholders and consumers.
- The "political squabbling over funding is no reason to postpone the congressionally mandated evaluation of the Government's proposal to remedy the antitrust concerns allegedly raised by the merger's consummation!" Leon wrote in the order.
The CVS-Aetna deal has been hung up in Leon's court as he has yet to bless the megamerger's last step.
He caused a hiccup in the final review process, which is usually considered a formality, when he refused to sign off on the settlement between DOJ and CVS-Aetna, which was designed to alleviate antitrust concerns.
To clear antitrust hurdles, Aetna sold its Medicare Part D business to a WellCare subsidiary. But the judge seemed to take issue with this aspect of the deal. "I am concerned that your complaint raises anti-competitive concerns about one-tenth of one percent of this $69 billion deal," Leon said during a previous hearing, according to a transcript of the court proceedings.
Leon said he is worried the deal does not go far enough to protect consumers from anticompetitive effects.He has since instructed the two companies to operate as separate units until his approval. Despite this, CVS and Aetna have already closed the deal and CVS CEO Larry Merlo sought to assure investors last week the company is already "one."
This isn't the only healthcare lawsuit held up by the federal government shutdown. The DOJ last week asked for a stay in appeals proceedings on the case regarding constitutionality of the Affordable Care Act until funding for the government is restored. A Texas judge ruled late last year the ACA is not constitutional now that the individual mandate penalty has been zeroed out.