News a federal judge is finally okay with CVS Health’s acquisition of Aetna makes it “100 percent clear” the two have been one company via a legally formed merger, CVS said Wednesday afternoon.
Judge Richard Leon of the U.S. District Court for the District of Columbia, who had been evaluating complaints the deal would harm consumers, signed off on a settlement agreement CVS negotiated with the U.S. Justice Department, according to multiple news reports.
“CVS Health and Aetna have been one company since November 2018, and today’s action by the district court makes that 100 percent clear,” CVS said in a statement Wednesday afternoon. “We remain focused on transforming the consumer health care experience in America.”
Since last year, Leon had continued to review whether CVS’ proposed $69 billion acquisition is in “the public interest,” calling for quarterly reports from the combined company.
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The American Medical Association, which testified before Judge Leon against the merger, said allowing the merger to stand “fails patients, will likely raise prices, lower quality, reduce choice, and stifle innovation,” AMA president Dr. Patrice Harris said in a statement Wednesday evening.
“For patients and employers struggling with recurrent increases to health insurance premiums, out-of-pocket costs, and prescription drug prices, it’s hard to find any upside to a merger that leaves them with fewer choices,” AMA’s Harris said. “Nothing in the deal guarantees reductions on insurance premiums or prescription drug costs.”
The deal is considered a landmark healthcare merger, marrying the drugstore giant CVS, which also operates more than 1,000 retail MinuteClinics and one of the nation’s largest pharmacy benefit management (PBM) companies, with Aetna, the nation’s third-largest health insurer with more than 22 million health plan subscribers.
Before Judge Leon’s rulings had delayed the deal, the U.S. Justice Department and nearly 20 state attorneys general had already approved the merger, signing off on a settlement that included Aetna divesting Medicare drug plans to WellCare Health Plans.
Judge Leon’s ruling now clears the way for CVS to roll out new products and health plan offerings without a legal cloud hanging above. CVS has already began offering new healthcare services and products in a new HealthHub store format the company recently announced.
This year, CVS has said its new health hub concept store will reach four U.S. metropolitan areas and 50 locations by the end of this year as part of a major expansion. CVS said the HealthHub rollout will grow to 1,500 locations by the end of 2021, or about 500 HealthHubs a year, CVS chief executive officer Larry Merlo told analysts a month ago on the company’s second quarter earnings call.
Date: September 05, 2019