CVS Acquisition Of Aetna Moves Forward

Desiree Burns
October 13, 2018

The merger still requires regulatory approval from some states, but the companies say the deal remains on track to close in the early part of the fourth quarter.

According to the reports from the Wall street Journal, the Justice Department antitrust enforcers have given the deal a green light. Aetna and CVS' businesses won't compete at all after Aetna divests its Medicare business.

"It's the latest example of change in a health-care industry bracing for disruption while regulators and consumers demand lower costs".

However, the approval has only been secured on the premise that the business sells its Medical Part D division to a subsidiary of WellCare as planned, which presently supports over two million USA consumers. In the future, CVS and Aetna said that patients will be able to go to a local CVS in between doctor visits for glucose level monitoring, counseling on how and when to use medications and advice on weight loss programs and better dietary habits.

CVS has said the deal will enable a variety of new medical services to be brought into its stores, part of its shift from corner pharmacy chain to a hub for health care with thousands of locations around the country.

CVS has more than 9,700 pharmacies and 1,100 Minute Clinics.

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"The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the health-care services that American consumers can obtain", Makan Delrahim, the head of the department's antitrust division, said in the statement. One big caveat: The companies negotiate those agreements every few years, so CVS wouldn't have to worry about losing Aetna to a rival one day.

The approval is another nail in the coffin of powerful pharmacy-benefit managers, which broker drug prices among pharmaceutical companies, insurers and employers.

"Despite the companies" big promises that consumers will see greater savings thanks to new "efficiencies, ' history has taught us to remain skeptical", George Slover, senior policy counsel for Consumers Union said in a statement in the wake of the CVS-Aetna merger approval.

In this deal, the consumer is likely to benefit, The New York Times reported.

In June, AMA president Barbara L. McAneny, MD, outlined the group's concerns during a hearing held by the California Department of Insurance stating that "The AMA has come to the conclusion that this merger would likely substantially lessen competition in many healthcare markets, to the detriment of patients", and therefore should be blocked. "Anthem, which operates for-profit Blue Cross plans in several states, is developing its own in-house pharmacy operation", he continues. "But Amazon does not sell insurance or clinical appointments", as David Goldman observes for CNN Business. "Not yet, anyway", he adds.

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