After months of speculation, CVS Health formally announced its decision to acquire Aetna on December 3. The deal will merge the largest pharmacy, the third largest PBM, and the third largest insurer. Perhaps most significantly, the deal represents a shift in pharmacy and in its value to health care.
The deal is still subject to antitrust scrutiny, but many analysts believe the deal will go through without a hitch. The merger would fall under the category of a so-called vertical integration, which sees parts of the production path merge together. In this case, that would be insurance and drug benefits. Horizontal mergers—the joining of two competitors, like the failed Walgreens/Rite Aid merger earlier this year—have previously been more difficult to pass through antitrust regulations, since they more directly impact consumer choice.
Some argue, however, that the deal will limit consumer choice. David Balto, the former Policy Director at the FTC and current Director of the Coalition to Protect Patient Choice, told Drug Topics that this deal “raises serious concerns for employers and consumers.” He pointed to the recent AT&T/Time Warner merger—which has come under intense antitrust scrutiny—as evidence that vertical integrations are not always assured.
Under this new deal, he said, CVS will be able to use its “gatekeeper position to prevent Aetna customers from using the pharmacy of their choice.” He added that the deal would give CVS more power to increase the price of drugs, and that the deal would be like “giving steroids to rebate schemes,” which he said are already problematic.
B. Douglas Hoey, MBA, CEO of NCPA, said in a statement that the deal will not lead to reported cost savings. He pointed to UnitedHealth’s 2015 acquisition of Catamaran as an example, saying that since that merger drug prices continued to increase. He said that this deal deserves close scrutiny over “whether this acquisition will lead to higher drug prices and fewer quality and convenience options for consumers.”
Hoey did concede that the deal could result in savings if CVS and Aetna contain the costs PBMs add to prescriptions.
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