The U.S. Department of Justice (DOJ) approved the merger of the pharmacy and health-care provider CVS Health with insurer Aetna, paving the way for the two companies to create one of the largest health companies in the U.S. The $69 billion merger’s approval is conditional on Aetna’s sale of its Medicare Part D prescription drug plan to the insurer WellCare Health Plans. This provision “would fully resolve the Department’s competition concerns,” according to a news release from the DOJ.
CVS and Aetna, which had revenues of $185 billion and $60 billion in 2017, respectively, said that the new company will provide an improved experience for customers. “Care will be coordinated among the health-care providers, caregivers and their health-care teams, leveraging the connectivity CVS will provide,” said CVS Health CEO Larry J. Merlo.
This merger continues the trend of health-care company consolidations, following the DOJ’s approval of Cigna’s buyout of Express Scripts, another pharmacy benefit manager, earlier this year. State regulators and advocates worry that these mergers, along with other large insurers’ acquisitions of pharmacy operations, will make it difficult for smaller competitors to compete in either industry.
In a statement released by George Slover of advocacy group Consumers Union, the group reiterated its opposition to the merger. “This type of consolidation in a market already dominated by a few, powerful players presents the very real possibility of reduced competition that harms consumer choice and quality.”
Sources: Department of Justice news release, October 10, 2018; The New York Times, October 10, 2018.