By Stephen Singer, The Hartford Courant May
15, 2019
A federal judge has set a hearing for up to
three days next month to review CVS Health Corp.'s $69 billion purchase of
Aetna, with the divestiture of Aetna's Medicare prescription drug plans playing
a key role.
U.S. District Judge Richard J. Leon on Monday
decided that six witnesses, including an antitrust expert and Alan Lotvin,
executive vice president and chief transformation officer at CVS Health, may
testify. CVS closed on the deal last November.
Essential to his evaluation, he said, is an
understanding of how participants in markets for individual prescription drug
plans are affected by markets for pharmacy benefit management services, he
said. Pharmacy benefit management, or PBM, services are typically used by
employers to help keep down prescription costs.
The Justice Department cleared the deal in
October after requiring the sale of Aetna's Medicare prescription drug plans to
WellCare Health Plans Inc. to address the government's concerns that the merger
would undermine competition.
If an analysis of PBM markets "was not so
intertwined" with evaluating the Justice Department's proposed requirement
of the sale of Aetna's Medicare prescription plans, "the court could still
hear from these witnesses before deciding whether the government's proposed
final judgement makes a mockery of judicial power or affirmatively harms third
parties," said Leon, a Washington, D.C., judge.
A CVS spokesman declined to comment.
The hearing is not a trial, the judge said.
The Justice Department will not be required to offer evidence and witnesses
will not be cross-examined.
Federal law requires court approval of
settlements the Justice Department reaches with merging companies to resolve
competition problems.
Antitrust experts and others have
"persuasively argued" that an assessment of the proposed judgment on
the public interest must account for how the divestiture may be affected by PBM
markets, Leon said.
Doctors' and pharmacists' groups have
criticized the CVS-Aetna deal, saying it limits choices for patients and
consumers.
The hearing is set to begin June 4 and extend
through June 6 at the latest.
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