CVS-Aetna, Cigna-Express Scripts deals close to DOJ clearance
The U.S. Department of Justice (DOJ) is close to clearing two mega deals in the healthcare space, according to a report from The Wall Street Journal, which cited people familiar with the matter. The two deals are CVS Health’s acquisition of health insurance provider Aetna for $69 billion and Cigna’s purchase of pharmacy benefits manager Express Scripts for $67 billion.
“Both deals could receive formal antitrust approval as soon as the next few weeks, these people,” according to the WSJ.
The news comes after the mega-mergers have come under fire from some groups, including the American Medical Association, regulators, and lawmakers that argue the transactions will significantly alter the healthcare space by hindering competition and potentially giving patients less choice and potentially higher prices.
However, the transactions will not be given the greenlight free and clear for CVS Health and Aetna. CVS is one of the nation’s largest PBMs. The approval will require the sale of some assets related to Medicare drug coverage to resolve some DOJ concerns of competition, according to the report. The size of the assets is still unknown, but WellCare health Plans, which just closed its own acquisition of Meridian Health Plans, has been floated as a potential buyer. Final discussions over the asset sales is still ongoing, the WSJ reported.
Cigna recently stated its antitrust process had cleared nearly half of the necessary regulators in a public filing, and executives have remained bullish that the deal will close in the second half of 2018.
With respect to the Medicare drug plans, CVS and Aetna will likely be required to sell off parts of their Part D businesses to complete the merger, the WSJ reported. CVS is the largest Medicare Part D plan, with 6.1 million members, the WSJ cited a Wells Faro record. Aetna is also within the top five biggest plans, with 2.2 million members.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."