Federal judge satisfied with CVS' plan to keep Aetna operations separate pending approval

CVS Pharmacy
District Judge Richard Leon saved his harshest rhetoric for DOJ, calling regulators “tone deaf [and] unnecessarily defensive." (Getty/Serenethos)

After weeks of uncertainty, a federal judge is open to allowing CVS’ acquisition of Aetna to move forward as long as the pharmacy chain complies with certain requirements.

Earlier this month, Judge Richard Leon of the District Court for the District of Columbia asked CVS and the Department of Justice (DOJ) to explain why he should allow the merger to move forward while he reviews whether it is in the public’s best interest. 

In its brief filed on Friday, CVS said it was “taking steps … that make [the] order unnecessary,” including having Aetna operate as a separate business, allowing Aetna to retain control over its product offerings, maintaining Aetna employees’ current compensation and benefits, and upholding a firewall to prevent the exchange of sensitive, competitive information between the two companies.

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These actions parallel those AT&T took while the court reviewed its acquisition of Time Warner this summer, CVS noted; Leon also presided over that case.

RELATED: WellCare closes Part D acquisition from Aetna

In court on Tuesday, Leon seemed satisfied with this setup, saying it “struck [him] as appropriate.” However, he wants the court to monitor CVS to ensure it continues to take those actions. Alternatively, the court may require the company to demonstrate its compliance to the court every 90 days. Leon offered no timeline for his decision.

The attorneys representing CVS and Aetna said they would let him know if the companies agree to that level of oversight by the end of the day on Thursday.

RELATED: CVS-Aetna got the green light. Brace yourselves, stakeholders say

Leon saved his harsher rhetoric for the DOJ, which failed to provide information about public comments on the settlement which required Aetna to sell its Part D business to WellCare. DOJ said in its brief that “public comments would not alter [its] analysis.”

The judge was particularly curious about comments from American Medical Association (AMA) provided. The AMA has vehemently opposed the deal for weakening competition, as it explained in a letter to the DOJ (PDF) in August.

Leon called the DOJ’s brief “tone deaf [and] unnecessarily defensive, if not hostile to the role of federal courts.” He ordered the DOJ to provide a summary of the comments it received by the close of business on Thursday as well.

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