With the Anthem-Cigna antitrust trial just short of a week away, both the defendants and the government are putting the finishing touches on the arguments they will make before a federal judge.
In July, the Justice Department sued to block Anthem from acquiring Cigna as well as Aetna’s proposed purchase of Humana, arguing both would drastically restrict competition in the health insurance industry to the detriment of consumers. The two cases will be tried separately, with Anthem and Cigna’s trial beginning Nov. 21 and Aetna and Humana’s starting Dec. 5.
The court will hear the Anthem-Cigna case in two phases--the first concerning how the deal will affect national markets; the second looking at how it would impact local markets. To prepare for the first phase, Anthem filed a pretrial brief late last week that outlined its core arguments.
"This is an extraordinary action in which federal and state competition authorities are ... seeking to deprive American consumers of lower healthcare costs," the brief stated.
In the brief, the insurer points out that the government’s complaint actually acknowledges the deal will likely reduce reimbursement rates paid to healthcare providers, and that these lower rates will likely be passed on directly to large employers and, by extension, consumers.
"This is an extraordinary action in which federal and state competition authorities are, according to their own allegations, seeking to deprive American consumers of lower healthcare costs," the brief says.
Yet it its own pretrial brief, the DOJ says it will “present extensive evidence that the merger is likely to have serious anticompetitive effects in dozens of markets.” A merger that significantly increases concentration in an already concentrated market is presumptively illegal, it adds.
The government’s brief also argues that it only needs to prove probable harm in one market--whether that's national accounts or any of the 35 local markets at issue.
“Defendants do not get a free pass to harm competition in some local markets even if their merger does not reduce competition in each of the alleged markets across the county,” the brief states.
In addition, the two sides disagree on how the courts should define certain markets, with Anthem saying the complaint against it “conflates two very different products”--contracts only for administrative services and fully insured contracts--but defining both as commercial health insurance. The DOJ, though, argues that the alleged markets in the case are “reasonably drawn and well-recognized by the industry.”
In earlier pretrial developments, Judge Amy Berman Jackson ruled that Anthem and Cigna must produce letters in which they accuse one another of breaching their merger contract. The DOJ had argued the letters helped prove its case that the deal wouldn’t result in the efficiencies the defendants claim.