Connecticut Insurance Commissioner Katharine Wade on Wednesday approved the $69 billion acquisition of Hartford health insurer Aetna Inc. by CVS Health Corp.
The decision is contingent on the companies’ divesting Medicare prescription drug businesses to assure competition.
CVS Pledges To Keep Aetna In Hartford For At Least 10 Years »
Larry Merlo, chief executive officer of CVS, said state backing gives the merger a big push.
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“Connecticut is our primary regulator, so this approval represents a significant step forward for our companies,” he said.
The OK from the state follows a major boost last week when the U.S. Department of Justice approved the acquisition on the condition that the two companies shed the Medicare prescription businesses. Several other states must sign off on the deal before CVS and Aetna formally close on it, which they expect before the end of the year.
CVS has committed to keeping Aetna in Hartford for at least 10 years as part of its $69 billion acquisition of the health insurer.
“Today’s approval means that Aetna will continue to call Connecticut its home for many years to come,” Gov. Dannel P. Malloy said.
In its deal with Connecticut, the Woonsocket, R.I.-based CVS also promised to keep the number of employees at Aetna and its Connecticut subsidiaries at about 5,300 for at least four years after the deal closes. The number reflects current staffing as of Oct. 1.
CVS announced in January it will keep Aetna in Hartford, where the insurer has operated since 1853. It will be one of several hubs, or centers of excellence as CVS calls the sites. Others are operated in Arizona, Illinois and Texas.
The settlement agreement between the state Insurance Department and CVS stipulating Aetna’s location and job count ended months of speculation about where Aetna would operate. Before striking the deal with CVS, it sought unsuccessfully to move to New York City in search of technology workers.
In her decision, Wade said CVS must report semiannually details of its business operations in Connecticut, including its integration of Aetna, any change in employment and other information.
Aetna and CVS also must provide the state Insurance Department with details of the final purchase price after all adjustments used to complete the acquisition.
Aetna and CVS told Connecticut regulators at an Oct. 4 public hearing considering approval of the deal that the tie-up will reshape health care as a grassroots service that puts consumers first.
But independent pharmacists told regulators the giant company that will emerge would threaten their businesses. A consumer advocate warned of reduced competition.
The deal, announced last December, is among the biggest in the industry. It will likely steer U.S. health care in a new direction linking health insurance with prescription drug management.
The acquisition by CVS, which began as storefront pharmacies and is now a prescription benefits manager that helps employers control drug costs, would represent a big change in the health care industry. For Aetna, it could be a major step to establishing itself as a digital business, using its significant collection of data while advancing its work in personalized health.
Date: October 22, 2018
Source: Courant