American Antitrust Institute urges DOJ to block CVS-Aetna merger, citing competition concerns

CVS pharmacy
A proposed megamerger between two healthcare giants could seriously hurt competition, a Washington-based think tank warns. (Mike Mozart/CC BY 2.0)

A proposed megamerger between two healthcare giants could trigger "a fundamental restructuring of the U.S. healthcare system" that would hurt both patients and competition, a Washington-based think tank warns.

In a letter (PDF) Monday to the U.S. Department of Justice, the American Antitrust Institute (AAI) urged regulators to block a proposed merger between Aetna and retail pharmacy giant CVS, arguing it would lead to higher service prices and decreased innovation. The group also raised concerns about the recently announced merger of Express Scripts and Cigna.

"Assuming both mergers move forward, the three large integrated PBM-insurer systems (i.e., CVS-Aetna, Express Scripts-Cigna, and Optum Rx-United Healthcare) that would dominate the markets would have weak, if any, incentives to compete," the group said. "This would effectively lock out competition by standalone PBMs, insurers and other market participants."

Webinar

How Providers Can Leverage Technology to Accelerate Business Recovery

Join us for this webinar on July 14th at 1pm ET / 10am PT to hear how organizations are responding to the COVID-19 crisis, re-engaging patients with postponed elective services, and utilizing contact tracing to support the health and wellbeing of their communities.

The group went on to say that the merger could lead to higher drug and service prices, lower quality of care and choice, and decreased innovation for drugs and insurance offerings.

RELATED: CVS, Aetna say their merger won't be anticompetitive, but some consumer advocates are skeptical

AAI's letter adds to previous concerns raised by the American Medical Association and Consumers Union. 

AMA previously said that the deal poses anticompetitive concerns "unique to vertical mergers," as a new competitor would have to enter the market in both insurance and PBM to compete with the combined CVS-Aetna.

"Close scrutiny is needed to determine if the ramifications of this massive merger will threaten the benefits of competition, including increased access and choice, lower prices and higher quality care for patients," AMA President David O. Barbe, M.D., previously told FierceHealthcare in an emailed statement.

CVS and Aetna have repeatedly pushed back on concerns that the $69 billion deal would hurt competition and have said it would increase community-based care. This week, Aetna CEO Mark Bertolini said the merger with CVS would allow the company to invest more heavily in health resources at the community level.

Suggested Articles

The Trump administration has proposed an enhanced Medicare add-on payment to encourage greater use of home dialysis for beneficiaries with ESRD.

Infectious disease expert Anthony Fauci said the U.S. is still in the middle of the first wave of COVID-19 and recent spikes are a resurgence.

Anthem's pharmacy benefit manager IngenioRx will acquire ZipDrug, a data-driven pharmacy management company.