The Department of Justice (DOJ) approved a $69 billion CVS-Aetna merger on Wednesday after Aetna agreed to sell off its Part D business.
The Part D divestiture was a condition of the merger's approval, according to the DOJ. Late last month, Aetna agreed to sell its 2.2 million Part D business to WellCare.
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Antitrust regulators said the divestiture would "fully resolve the Department’s competitive concerns." The DOJ along with attorneys general in five states filed a proposed settlement that approves the deal on the condition that Aetna sell off its Part D plans.
“Today’s settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said in a
statement. “The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain.”
In a complaint filed to U.S. District Court for the District of Columbia, DOJ attorneys argued that without the divestiture, the combined company would cause "anticompetitive effects, including increased prices, inferior customer service, and decreased innovation" in the 22 states where Aetna sells Part D plans. The court must approve the settlement in order for it to move forward.
"DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer healthcare experience," CVS Health President and Chief Executive Officer Larry J. Merlo said in a
statement. "We are pleased to have reached an agreement with the DOJ that maintains the strategic benefits and value creation potential of our combination with Aetna. We are now working to complete the remaining state reviews."
Part D consolidation was the primary issue raised among groups opposing the merger, including the
American Medical Association and the California Insurance Commissioner.