AMA Asserts that Anticompetitive CVS Aetna Merger Should Be Blocked

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In March, shareholders of both CVS Health and Aetna approved the $69 billion acquisition of Aetna by the drugstore chain.

The huge deal will blur the traditionally distinct lines between the insurance business and drugstores and pharmacy benefits manager. Aetna has more than 20 million enrollees in various health plans and operates both commercial health plans as well as state Medicaid programs and Medicare Advantage plans. CVS has a network of more than 9,700 retail pharmacies throughout most of the U.S.

As of this writing, CVS is complying with Department of Justice information requests and is working on getting approval from 28 insurance markets. Principals predict that the deal will close by the end of 2018.

AMA President Testifies That Merger Will Negatively Affect Patients

At a recent hearing before the California Department of Insurance and the California Insurance Commissioner, American Medical Association (AMA) President Barbara L. McAneny, MD urged regulators to block the proposed merger.

The AMA’s viewpoint is that the merger would substantially lessen competition in many health care markets, negatively affecting patients. 

The combined CVS-Aetna entity may assume dominant positions in health insurance, pharmaceutical benefit management, retail and specialty markets that already have little competition. Dr. McAneny, who is an oncologist, spoke specifically about the potential threat to the quality of care and safety of cancer patients because of the merger’s possible impact on the specialty pharmacy market.

The AMA also feels that this deal, if approved, would lead to higher premiums and lower-quality insurance products because of reduced competition. Even the merger itself faces enormous implementation challenges that will make any efficiencies that benefit patients and consumers unrealized.

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