CVS Health and Aetna are planning to merge in a deal that would create a new, vertically integrated company containing a health insurer, a retail pharmacy, and a pharmacy benefits manager, which negotiates prescription-drug prices with drugmakers.
While CVS and Aetna shareholders have approved the deal, it remains to be seen whether federal or state regulators will step in to block it.
On Tuesday, a judge approved the merger of Time Warner and AT&T, a similar merger. The news sent CVS and Aetna’s stocks up after hours.
The ruling could have big implications for how the Trump administration treats healthcare mergers.
A decision about a proposed merger between two telecommunications companies could be good news for a series of healthcare mergers.
CVS Health’s proposed $69 billion mega-merger with Aetna would create a new company containing numerous healthcare businesses, including a health insurer, a retail pharmacy, and a pharmacy benefits manager, which negotiates prescription-drug prices with drugmakers.
Though the deal would combine healthcare businesses that don’t compete directly with each other, the US government could still move to block it on the grounds that it would affect competition in the healthcare system.
On Tuesday, a judge approved the case of Time Warner and AT&T, another so-called vertical merger that the Department of Justice took to court.
The decision could be a guidepost for whether the Trump administration may take action against CVS-Aetna as well, Matthew Cantor, a partner at the law firm Constantine Cannon, told Business Insider in April.
“We’re in the Wild West somewhat as to what antitrust policy is going to look like, as we are with so many aspects of the Trump administration, ” Cantor said. “We’re in the Wild West somewhat as to what antitrust policy is going to look like, as we are with so many aspects of the Trump administration, “
The proposed merger aims to combine Time Warner, which creates content through its businesses like HBO and Warner Bros., with AT&T, which distributes that content.
The approval of the merger on Tuesday could have implications for how the Trump administration will address some of the healthcare mergers that have been unfolding over the past few months and if they’ll be challenged as well.
CVS and Aetna were the first to combine, but since then Cigna has made a $67 billion deal with Express Scripts, the US’s largest standalone pharmacy benefits manager, and reports have …read more
Source:: Business Insider