Jun
14, 2019
Federal judge
Richard Leon is raising antitrust concerns about CVS Health's $78 billion
takeover of Aetna, but legal experts say he simply doesn't have
authority to nix the deal.
Why it matters:
The biggest companies in health care keep getting bigger, and
critics fear anticompetitive effects — but nothing has actually slowed the
industry's rapid consolidation.
Driving the
news: A New York Post
article claimed Leon "appears to be nearing a surprise move to
block" the CVS-Aetna deal. But that isn't quite accurate.
- "[Leon]
can't stop the deal because it's already happened," said Joe Krauss,
a former antitrust attorney at the Federal Trade Commission now at Hogan
Lovells.
Details: CVS and Aetna
completed their transaction last November. To satisfy antitrust concerns, the
Department of Justice required Aetna to sell its Medicare
prescription drug plans.
Where it
stands: Leon can either approve that settlement, or "he can say the
remedy was insufficient," said Andrea Agathoklis
Murino, a former DOJ antitrust attorney now at Goodwin Procter. But
he can't undo the
merger.
- If
Leon rejects the settlement, DOJ would likely appeal or negotiate a new
remedy with CVS and Aetna.
- DOJ
also could order CVS and Aetna to unwind their merger, but that process is
messy,
and it's never happened under the type of
proceedings happening here.
Between the
lines: The settlement — making Aetna sell its Medicare drug plans — wouldn't materially
change the market share for those policies, nor does it address
concerns of combining health insurance and drug benefits.
- "This
is a highly consolidated market," said Mike Landis,
litigation director for the U.S. Public Interest Research Group, which
opposed the merger. "We hope DOJ will see the light."
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