Anthem-Cigna trial slated for November; DOJ willing to talk settlement

DOJ

The antitrust trial against Anthem and Cigna is set to begin in November--meaning it won’t conclude by the end of the year as the insurers had hoped--but the Justice Department also is open to hearing settlement offers from the defendants, Bloomberg reports.

In a hearing Friday, U.S. District Court Judge Amy Berman Jackson didn’t set an exact date for the trial, but said it would likely start in mid-to-late November. That would be earlier than the December date set for the Aetna-Humana trial and the February start date the DOJ had originally requested.

Yet it is still a setback for Anthem, which has said it needs the case to conclude by the end of 2016 to meet an April deadline specified in its contract with Cigna, or the smaller insurer could abandon the deal.

Indeed, Jackson noted at the hearing that given the two companies’ contentious relationship, it is “a bizarre situation that we’re doing all of this for the benefit of a merger that may not be desired,” the National Law Journal reports.

But in what could be a positive sign for Anthem and Cigna, DOJ lawyer Jon Jacobs said Friday antitrust officials are open to settlement offers, noting that “we’re always willing to hear any proposals that the defendants have,” according to Bloomberg.

Jacobs’ statement was surprising given that Leerink Partners had pegged the likelihood of a successful trial outcome or settlement at 25 percent for the Anthem-Cigna deal, analyst Ana Gupte says in a research note. Thus, she believes it “meaningfully increases the optionality for upside” for the companies.

But Jennifer Rie, an antitrust lawyer at Bloomberg Intelligence, tells Bloomberg it's normal for the DOJ to be willing to hear settlement offers. What is not clear, she says, is how Anthem and Cigna could come up with remedies to the DOJ’s many antitrust concerns about the deal.

- read the Bloomberg report
- here’s the National Law Review article
- check out Leerink's research note