A New York Assemblyman has urged the U.S. Department of Justice (DOJ) to block the $69 billion planned merger between CVS Health and Aetna. The deal has already been approved by shareholders of both companies.
The transaction, which will bring together one of the nation’s largest drug store retail chains and pharmacy benefit managers with a major health insurance provider, has already met backlash among some policymakers and industry groups, including the American Medical Association.
Critics of the deal argue it will limit market competition and potentially harm patients with less choice and access.
Democratic New York Assemblyman Kevin Cahill, told the DOJ in a letter that the deal should be blocked on the grounds that the loss of competition will increase prescription drug prices, harm independent pharmacies and reduce provider choice. Aetna controls a significant portion of the health insurance market in New York, according to a statement. CVS owns Caremark, the nation’s second-largest PBM.
“If this deal goes through, three major healthcare companies will become one large conglomerate and there will be a dramatic loss of some of the positive impact that market competition can bring,” Cahill said in a statement. “The sponsors have simply failed to substantiate how this mega merger will result in better patient care and lower costs. Though they were given every opportunity, CVS and Aetna were unable or unwilling to provide substantiation of any significant public benefit whatsoever. … It is becoming clear that this merger will truly not benefit anyone other than CVS, Aetna, Caremark and their stockholders.”
The deal has also been opposed by a California regulator for similar reasons. The deal is still currently under review by the DOJ.
“The sheer magnitude of this vertical restructuring is likely the biggest in healthcare and perhaps in the history of commerce in our nation,” Chaill wrote. “As such, the appraisal by the United States Department of Justice should proceed with the utmost of caution.”
Another mega-deal in the healthcare space, the $67 billion acquisition of PBM Express Scripts by Cigna, recently cleared one hurdle after shareholders overwhelmingly approved the transaction.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."