Hearing set for court review of $69B CVS-Aetna merger
The next step in the ongoing saga of the $69 billion merger between CVS Health and Aetna is scheduled for June 4. That’s when a hearing is set in the U.S. District Court the for the District of Columbia, where six witnesses made up of industry stakeholders will testify as U.S. District Judge Richard Leon will decide whether the deal can be finalized.
The merger, which was approved by all other regulators and the Department of Justice in late 2018, brought together one of the nation’s largest pharmacy benefits managers (PBMS) and pharmacy retailers with the nation’s third-largest retailers. While the deal was closed by CVS Health and the integration of the two companies is well underway, the transaction is still being reviewed by the courts.
Hearing process
The hearing stems from a civil antitrust suit filed at the end of 2018, and Judge Leon decided in April to allow witnesses, who were mostly from industry associations, to testify in the public interest. Leon will allow three witnesses for each side in the case to testify June 4 to help him decide a final judgment.
However, Leon was firm that the hearing was an information-gathering procedure.
“With respect to the procedures the court will follow during the hearing, it is worth stressing, at the outset, that this hearing is not a trial,” Leon wrote in a filing from May 13. “In short, this hearing is merely an opportunity for the parties and the amici [friends of the court] to provide the court with whatever additional information and analysis they believe will aid the court in determining whether the government’s proposed final judgment is in the public interest.”
CVS Health and the DOJ previously tried to dismiss witness testimony in the case, arguing that that the company had already satisfied antitrust concerns by selling off Aetna’s Medicare Part D business before completing the transaction.
Leon disagreed that the step was enough, calling out the DOJ for rubber stamping the transaction too quickly. In December 2018, the judge warned CVS Health to slow down integration with Aetna until the review process concluded.
CVS and Aetna are already well integrated as of May 1, with CVS Health reporting a 34.8% increase in revenue, to $61.6 billion, during the first quarter of 2019, according to a quarterly earning report. The company expects $750 million in synergies from the integration of Aetna in 2020.
In addition to the six witnesses, Leon will likely hear attorneys arguments at a later date, he wrote.
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."