- President Donald Trump announced on Monday he has nominated Makan Delrahim, a former lobbyist for Anthem, as the next head of the Department of Justice's (DOJ) antitrust division, which is overseeing the case against the $54 billion merger between Anthem and Cigna.
- Delrahim, who has already been assisting President Donald Trump's administration as the White House deputy counsel, would serve as the division's assistant attorney general if confirmed by the Senate.
- The pick has raised additional concerns with the review process of the proposed Anthem-Cigna merger.
Delrahim's new position could be welcomed by Anthem, which has previously suggested that it would have a better chance of having its acquisition of Cigna go through under a new administration. Anthem is "committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice" the health insurance giant wrote in the February announcement of the lawsuit it filed against Cigna seeking a temporary restraining order, which was granted, to prevent it from terminating the deal.
The Court of Appeals has already appeared to be more inclined to agree with Anthem's argument that combining the two companies would benefit consumers. And Delrahim has had a working relationship with Anthem in the past. During his time as a partner at Brownstein Hyatt Farber Schreck, the firm received $370,000 in lobbying fees from Anthem from 2015 through 2016. The firm has also previously worked on the “antitrust issues associated with Anthem's proposed acquisition of Cigna,” a recent lobbying report shows.
President Trump's announcement came a few days after the Anthem/Cigna-DOJ oral argument in the Court of Appeals began. On Friday, Anthem contended that the medical cost savings of an estimated $2.4 billion the combined company would generate would benefit consumers through lower premiums. Yet Anthem attorney Christopher Curran noted that the new company would seek to cut fees to care providers.
In addition, the DOJ argued in a brief filed with the Court of Appeals earlier this month that court documents "showed Anthem had no real plan to achieve" the medical cost savings it claimed the combined company would create. It added that the cost savings "are purely aspirational and cannot justify the proposed merger.” The DOJ filed the lawsuit in July 2016 to block the merger due to anti-competition concerns. A federal judge ruled in favor of the DOJ last month after concluding that allowing the deal to be completed would lead to reduced competition, hindered innovation efforts and increased prices to consumers. The combined company would become the largest health insurer in the U.S.
The Court of Appeals is expected to make a decision on whether it will uphold or overturn the court blocking of the deal sometime in the near future, but Anthem and Cigna are running out of time. If they fail to complete the merger before their contractual deadline (April 30) Anthem would owe Cigna a $1.85 billion breakup fee. However, Cigna has wanted out since last month when it filed a lawsuit against Anthem seeking a declaratory statement that it had lawfully terminated the deal, as well as at least $13 billion in damages.
Many have expressed concerns with the Trump administration's handling of the case, including watchdog group United to Protect Democracy, which recently urged the Office of Inspector General to initiate an investigation of communications between the White House and the DOJ with regards to Anthem-Cigna. "While we expect that Mr. Delrahim would be recused personally from any involvement in this matter, his potential nomination raises serious questions about discussions between the White House and the Department (DOJ) regarding the Department’s position in this case," the group wrote in a letter to Inspector General Michael Horowitz.
On the other hand, some believe Delrahim's experience makes him well qualified for the role. It wouldn't be his first time at the DOJ's antitrust division. He previously served as its deputy assistant attorney general. "Through his prior service as a Deputy Assistant Attorney General, Makan understands the agency from the inside and has seen the talent and commitment of the career staff up close," Leslie Overton, a partner in DC-based Alston & Bird’s antitrust team, tells Healthcare Dive. "Makan has valuable experience representing the antitrust division and United States in multilateral fora and understands the importance of international cooperation on competition enforcement and policy," Overton, who has held senior leadership roles in the DOJ's antitrust division under two presidential administrations, adds.