Anthem plans to appeal a federal judge’s decision to block its merger with Cigna, but its acquisition target may not be willing to fight for the deal’s survival.
Judge Amy Berman Jackson issued her ruling late Wednesday, saying the deal violated antitrust laws because it would "eliminate the two firms’ vigorous competition against each other for national accounts."
In January, a different federal judge ruled against the Aetna-Humana deal. Neither company has indicated yet whether it plans to appeal.
For Anthem’s part, it did not hesitate to say that it plans to defend its deal.
“The company promptly intends to file a notice of appeal and request an expedited hearing of its appeal to reverse the court’s decision so that Anthem may move forward with the merger, which was approved by over 99% of the votes cast by the shareholders of both companies,” the insurer said in a statement.
Cigna, on the other hand, was far more ambivalent about how it will proceed. “Cigna intends to carefully review the opinion and evaluate its options in accordance with the merger agreement,” the company said in a brief statement.
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Earlier this year, Anthem submitted a filing to extend the end date of the deal to April 30, a move suggesting it was preparing to appeal an adverse ruling. But Cigna shot back with a filing that said it had not yet decided whether to agree to extend the deal or terminate the companies’ agreement.
In Jackson’s order, she commented on the unusual amount of acrimony between the two merging companies, noting that not only did Cigna officials’ testimony undermine Anthem’s argument, but Cigna also cross-examined the defendants’ own expert and refused to sign Anthem’s findings of fact and conclusions of law in the case.
“Anthem urges the court to look away, and it attempts to minimize the merging parties’ differences as a ‘side issue,’ a mere ‘rift between the CEOs,” she wrote. “But the court cannot properly ignore the remarkable circumstances that have unfolded both before and during the trial.”
Provider groups applaud court’s decision
Industry groups representing healthcare providers, which had vigorously opposed both major insurer mergers, were pleased with the ruling against the Anthem-Cigna deal.
“Today’s ruling by the D.C. District Court confirms that the Department of Justice made the right decision in challenging the Anthem-Cigna mega-merger,” American Hospital Association President and CEO Rick Pollack said in a statement. “As a result, millions of Americans have been protected from higher insurance costs, fewer choices of providers and less innovation in healthcare delivery.”
The American Medical Association also praised the decision, saying it agreed with the judge’s conclusion that Anthem’s “strategy of gaining size to strong-arm physicians would not have benefited consumers.”
“Instead, it would diminish prospects for innovation in healthcare delivery and payment,” the group’s president, Andrew W. Gurman, M.D., said in an emailed statement.