By Crystal Owens – Reporter, Tampa Bay
Business Journal August 9, 2019
A
federal judge reviewing a U.S. Justice Department decision to allow CVS Health
Corp. to merge with health insurer Aetna has said that the agreement is valid
under antitrust law.
The
merger was seen as a key step in the WellCare-Aetna Medicare agreement.
WellCare
Health Plans Inc. (NYSE: WCG), a Tampa-based managed care provider for
government-sponsored health programs, entered into an asset
purchase agreement and related agreements with Aetna Inc. in September
2018 to acquire Aetna’s entire standalone Medicare Part D prescription drug
plan business, also known as the Aetna Part D business, beginning Dec. 31,
2018, according to the U.S. Securities and Exchange Commission's filing.
The
Justice Department in October said it would require CVS and Aetna to resolve
overlap between their Medicare Part D plans in order to approve the deal.
Since
then, U.S. District Court for the District of Columbia Judge Richard Leonhad been reviewing a government
plan to allow the merger on the condition that Aetna sell its Medicare
prescription drug plan business to WellCare Health Plans Inc.
Just
days after WellCare Health Plans' announcement in November 2018,
Leon asked the Department of Justice to provide more information about the
CVS-Aetna transaction, ordering the companies to remain separate until a final
decision was handed down.
In
December, Leon said he was "less convinced" the asset sale to
WellCare would resolve antitrust concerns. Since then, Centene Corp. (NYSE: CNC) agreed to
acquire WellCare for $17.3 billion.
Most consent
agreements that antitrust agencies strike with companies to resolve competitive
concerns are approved by federal courts under the 1974 Tunney Act, which
requires courts to ensure the agreements are in the public interest.
The
Department of Justice, which sought to prevent the merger for being
anti-competitive, filed a status update on Dec. 2 that said CVS and Aetna
should not have to keep their assets separate until the court determines the
case is “in the public interest,” as required by law.
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