Federal Judge Richard Leon heard closing arguments on Friday in the merger of CVS Health and Aetna, and is expected to make a decision soon, according to one of the organizations testifying against the deal.
“While he did not issue a decision, Judge Leon stated his intent to issue a ruling in the not-so-distant future, noting that the merger potentially has ‘grave consequences to millions of people,'” said the AIDS Healthcare Foundation.
The American Medical Association, which is also opposed to a combined CVS and Aetna, presented evidence showing that the merger would hurt competition and increase premiums in the Medicare Part D prescription drug plan market. Before CVS bought Aetna, the two competed against each other for PDP customers, the AMA said.
At the end of its oral argument, the AIDS Health Foundation proposed an alternative beyond approval or rejection of the proposed settlement agreement issued by the Department of Justice.
AHF proposed that the court consider remedies to address vertical integration concerns including: A provision requiring that all rival pharmacies have non-discriminatory access to CVS Caremark’s pharmacy networks at fair reimbursements that cover actual drug costs and dispensing costs; a provision that managed care plans should not be denied access to CVS Pharmacy networks and that managed care plans’ access should be at a fair price; and a provision that all Aetna plan members must be allowed to opt out of any CVS/Caremark specialty or other mail order programs.
WHY THIS MATTERS
Judge Leon opted to review the DOJ’s settlement agreement. While he cannot technically derail the deal, his signature is needed for closure of the settlement agreement. He appears to side with opponents on their argument that the merger would stifle competition.
One of the main arguments is that a lack of competition will push out independent pharmacies. CVS is among the largest players in the retail pharmacy market and operates a large pharmacy benefit manager.
PBMs are going after the lucrative specialty pharmacy business and are willing to use anti-competitive tactics such as oppressive reimbursement fees to take that business away from independent pharmacies, said Laura Boudreau, AHF’s Chief of Operations/Risk Management and Quality Improvement.
They are also pushing for consumers to get their drugs by mail order, she said.
“As an HIV doctor for over three decades, I know that personal, high touch interactions keeps chronically ill patients engaged in their care and adherent to their medications – the key to staying healthy. AHF’s pharmacies provide those high-touch services, including education, counseling, follow-up calls and medication management,” said AHF Chief Medical Officer Dr. Michael Wohlfeiler.
The U.S. Department of Justice has already approved the $ 69 billion merger, which closed last November. The DOJ stipulated that Aetna divest of its Medicare Part D plans and it did so, to WellCare.
The merger closed in November, but eight months later, final approval drags on.
CVS Health has said it and Aetna are one company.
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