DOJ rebukes insurers' request for expedited merger trials


Four of the country's largest health insurance companies disagree with the Justice Department over how quickly the trials concerning their mergers should begin, the latest court filings show.

At issue in the pretrial stage is when the trials should take place and whether the Anthem-Cigna and Aetna-Humana cases should be tried separately. Lawyers on both sides of the merger dispute argued their case in a hearing Thursday, Leerink Partners analyst Ana Gupte reported in a research note. 

Concerning timeliness, Anthem says in a court filing that four states have suspended their review of the proposed Cigna acquisition process until the lawsuit from the DOJ is complete. As a result, the insurer would like to see the trial completed before the end of the year. Aetna and Humana have also asked for a court date before the start of 2017.

The Justice Department replied in a filing that a trial date of Feb. 17, 2017, “while still ambitious for two cases of this magnitude, is both workable and justifiable.”

Regarding the request for a separate trial, “there are no material efficiencies to be gained--and likely only confusion--from conducting the proceedings jointly,” Anthem’s lawyers argued in their filing.

Anthem CEO Joseph Swedish has argued that a key benefit of the Cigna acquisition is the fact that it would help stabilize the ACA exchanges by allowing the companies to expand their presence and boost competition in the individual market. Aetna’s recent announcement that it will reconsider its participation in certain marketplaces, as well as drawbacks from other major insurers, has called into question the long-term viability of the exchanges.

But the Justice Department countered the deal reduces competition dramatically in a number of important markets. The DOJ also worries that since Cigna has been a major innovator with its wellness programs, “all this competition would be lost as a result of the merger,” according to antitrust official William Baer. In the Aetna-Humana deal, the DOJ argues that it would harm competition in the Medicare Advantage market.

Both mergers will have a leg up because Judge John Bates--who will preside over the Aetna-Humana and Anthem-Cigna cases--previously handed the Justice Department’s antitrust officials a loss when he allowed a merger between two major coal companies in 2004, notes a Reuters report. A lawyer familiar with Bates tells the news outlet that “he is a very favorable draw for the defendants in this case.”

- here's Gupte's research note
- read the DOJ’s response filing
- read Anthem’s filing for expedited proceedings and separate trial
- here's Aetna and Humana's filing
- read the Reuters article