Taking the stand in federal court Tuesday, an Anthem executive rebutted federal prosecutors' arguments against the company's planned acquisition of Cigna, testifying that the deal will maintain competition and offer a new avenue for innovation.
Morgan Kendrick, Anthem’s president of national accounts, said during his testimony that Cigna “is exceptionally innovative,” according to the Wall Street Journal, which was critical element in the decision to move forward with the deal.
He said Anthem hopes to use Cigna’s plans to “aggressively compete” with existing Blue Cross Blue Shield plans, noting that large employers are looking beyond major insurance carriers and exploring new options with regional companies and start-ups, according to Bloomberg.
The merger would allow Anthem to compete with smaller insurers in new markets, Kendrick added. Anthem CEO Joseph Swedish previously said the merger would provide a boost to public exchange offerings.
Concerns around competition are at the heart of the Justice Department's decision to block the merger. U.S. Attorney General Loretta Lynch has said that Anthem’s takeover, along with the Aetna-Humana merger, would “fundamentally reshape the insurance industry… drastically constricting competition in a number of key markets.”
Anthem’s arguments that the merger would not dilute competition came shortly after newly unsealed testimony shed more light on the growing rift between the two companies. The two insurers appeared to butt heads from the very beginning when Cigna rejected Anthem's bid to acquire it. Discord continued throughout the takeover, and Monday’s unsealed testimony showed that Cigna had stopped cooperating with integration efforts, prompting Anthem to assemble a confidential team on its own to handle the task.