Publish date: September 7, 2019 By Alicia
Gallegos
Physician
groups are criticizing a judge’s decision to approve the merger of pharmacy
chain CVS Health and health insurer Aetna, saying the deal will raise prices
and lower quality.
Judge
Richard J. Leon of the U.S. District Court for the District of Columbia allowed
the merger to move forward on Sept. 4, ruling that the acquisition was legal
under antitrust law. The merger was approved by the Department of Justice in
October 2018 on the condition that Aetna sell its Medicare prescription drug
plan (PDP) business to independently owned competitor, WellCare Health Plans.
Judge Leon has been examining the government’s plan since late 2018.
In
his decision, Judge Leon
acknowledged that the merger will have widespread effects for millions of
patients and noted the many industry stakeholders, consumer groups, and state
regulatory bodies have raised concerns about the merger.
“Although
[the opposition] raised substantial concerns that warranted serious
consideration, CVS’s and the government’s witnesses, when combined with the
existing record, persuasively support why the markets at issue are not only
very competitive today, but are likely to remain so post merger,” Judge Leon
wrote. “Consequently, the harms to the public interest the [opposition] raised
were not sufficiently established to undermine the government’s conclusion to
the contrary. As such, for all of the above reasons, I have concluded that the
proposed settlement is well ‘within the reaches’ of the public interest and the
government’s motion ... should therefore be granted.”
Patrice
A. Harris, MD, president for the American Medical Association, said the judge’s
decision fails patients and will likely raise prices, lower quality, reduce
choice, and stifle innovation.
“The
American people and our health system will not be served well by allowing a
merger that combines health insurance giant Aetna Inc. with CVS Health
Corporation,” Dr. Harris said in a statement. “For patients
and employers struggling with recurrent increases to health insurance premiums,
out-of-pocket costs, and prescription drug prices, it’s hard to find any upside
to a merger that leaves them with fewer choices. Nothing in the deal guarantees
reductions on insurance premiums or prescription drug costs. As for promised
efficiency savings, that money will likely go straight to CVS’s bottom line.”
Angus
Worthing, MD, government affairs committee chair for the American College of
Rheumatology, said his group is concerned that the merger will hinder progress
that has been made toward creating cost transparency and will make it easier
for costs savings to remain secret.
“We hope
that regulators will now actively watch the conduct of the merged company to
ensure patients are protected,” Dr. Worthing said in a statement.
In
a statement, CVS noted
that CVS Health and Aetna have been one company since November 2018, stating
that the court’s action “makes that 100 percent clear.”
“We
remain focused on transforming the consumer health care experience in America,”
they said.
CVS
Health announced it would buy Aetna for $69 billion in 2017 and finalized the
acquisition in 2018. CVS Health President and CEO Larry J. Merlo said the combined
company would connect consumers with the powerful health resources of CVS
Health in communities across the country and Aetna’s network of providers to
help remove barriers to high quality care and build lasting relationships with
patients.
Assistant
Attorney General Makan Delrahim of the Justice Department’s antitrust division
said the agency was pleased with the court’s decision to approve the
government’s plan and finalize the merger.
“The
divestiture of Aetna’s individual PDP business provides a comprehensive remedy
to the harms the Justice Department identified,” Mr. Delrahim said in a statement. “The entry of
the final judgment protects seniors and other vulnerable customers of
individual PDPs from the anticompetitive effects that would have occurred if
CVS and Aetna had merged their individual PDP businesses.”
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