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."

Conference

2019 Drug Pricing and Reimbursement Stakeholder Summit

Given federal and state pricing requirements arising, press releases from industry leading pharma companies, and the new Drug Transparency Act, it is important to stay ahead of news headlines and anticipated requirements in order to hit company profit targets, maintain value to patients and promote strong, multi-beneficial relationships with manufacturers, providers, payers, and all other stakeholders within the pricing landscape. This conference will provide a platform to encourage a dialogue among such stakeholders in the pricing and reimbursement space so that they can receive a current state of the union regarding regulatory changes while providing actionable insights in anticipation of the future.

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.

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