Aetna merger cleared, with conditions

Henrietta Strickland
October 13, 2018

The deal is expected to give the Woonsocket, Rhode Island, drugstore chain a bigger role in health care, with the companies combining to manage care through CVS stores, clinics and prescription drugs.

While part of the AMA's concern was resolved with the DOJ requirement that Aetna sell off its Part D business, other factors remain such as the anticompetitive effects the merger would have on pharmacy benefit manager (PBM) services, health insurance, retail pharmacy, and specialty pharmacy.

According to the reports from the Wall street Journal, the Justice Department antitrust enforcers have given the deal a green light.

"Today's settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals", Assistant Attorney General Makan Delrahim, who leads the Justice Department's antitrust division, said in the announcement. In the future, CVS and Aetna said that patients will be able to go to a local CVS in between doctor visits for glucose level monitoring, counseling on how and when to use medications and advice on weight loss programs and better dietary habits. "Care will be coordinated among the health care providers, caregivers and their health care teams, leveraging the connectivity CVS will provide. The result could make CVS a destination for more than flu shots and treatment of minor illnesses", Fung continues.

"DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer healthcare experience".

The Aetna-CVS mashup is just the latest tectonic shift in the health care industry. This unique integrated model increases access to quality care, delivers better health outcomes and lowers overall health care costs. "The DOJ recently cleared health insurer Cigna's acquisition of pharmacy benefits manager Express Scripts", they add. CVS still needs to get approvals from several states.

"The combination of CVS and Aetna creates an enormous market force that we haven't seen before, straddling more market sectors and creating new and potentially far-reaching profit-maximizing incentives to undermine competition". Walgreens Boots Alliance the United States's last remaining giant stand-alone pharmacy chain, and its deal-friendly CEO, Stefano Pessina, has spoken about bringing together pieces of the medical supply chain. "Critics say pharmacy managers' secretive deals - under which price-setting strategies are not publicly disclosed - enrich companies on all sides of the prescription drug pipeline while failing to benefit consumers", points out Reed Abelson for the New York Times. Aetna, on the other hand gained close to $60bn in revenue, providing essential health insurance to 22mn United States consumers.

That would include Amazon, "which looms large in the health care market even though it hasn't made a major entry yet".

Other reports by Click Lancashire

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