WellCare Health Plans has agreed to purchase Aetna's entire standalone Part D business, a move that is likely to help the insurer win over regulators in its merger with CVS.
Aetna's Part D plans include 2.2 million members. Aetna will retain the financial risks and continue providing administrative services for the plans through 2019, according to a financial filing from WellCare. The purchase is subject to the closing of the $69 billion CVS-Aetna merger, which is expected to close by the end of the year.
The terms of the deal were not disclosed by either company, but Aetna's SEC filing stated the "purchase price is not material to Aetna." WellCare said it will fund the purchase with cash on hand.
WellCare was rumored to be a player in Aetna's Part D divestiture designed to appease antitrust regulators by limiting the consolidation of Part D plans in its merger with CVS. Both the California Health Insurance Commissioner and the American Medical Association have raised concerns about a lack of Part D competition as a result of the deal.
"CVS Health believes the divestiture is a significant step toward completing the DOJ’s review of the CVS Health transaction," CVS said in a separate filing. "CVS Health and Aetna continue to engage in productive discussions with the DOJ. CVS Health continues to expect the CVS Health Transaction to close in the early part of the fourth quarter of 2018."
WellCare just recently completed a $2.5 billion acquisition of Meridian Health, adding a pharmacy benefit manager to its portfolio.