Justice Department approves $69 billion CVS Health-Aetna merger

Health Care ETFs Retreat on DOJ Approval of Aetna-CVS Merger

Health Care ETFs Retreat on DOJ Approval of Aetna-CVS Merger

The Justice Department today approved the deal on the condition that Aetna moves ahead with its plan to sell its Medicare Part D prescription drug plan business, resolving some anti-monopoly issues.

Both pairs say their mergers will save costs for consumers and provide better coordinated care by bringing pharmacy and insurance services under one roof. Steering Aetna customers toward its stores to fill prescriptions - and shop for shampoo and razors - could also help CVS cope with a rocky retail landscape.

About 1,100 of CVS' retail locations include walk-in healthcare clinics, and CVS hopes to use the Aetna deal to expand the range of health services it can offer to Aetna's vast membership and other customers.

The approval comes just a few weeks after the US signed off on another deal combining a big health insurer with a pharmacy-benefits manager - Cigna Corp.'s $54 billion takeover of Express Scripts Holding Co.

CVS Health Corp.'s plan to buy Aetna Inc. for $69 billion was cleared by US antitrust regulators Wednesday, paving the way for the nation's largest pharmacy chain to acquire one of the largest health care insurers.

The deal is aimed at simplifying the healthcare experience for consumers demanding change.

Much of the US health-care system revolves around fixing costly ailments. "The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the health-care services that American consumers can obtain", said Makan Delrahim, the head of DOJ's antitrust division, in a statement Wednesday.

Health Care ETFs Retreat on DOJ Approval of Aetna-CVS Merger 1

The CVS-Aetna marriage is part of a wave of consolidation rolling across the USA healthcare industry.

Aetna shares were up 1.1 percent to $206.04 at 10:46 a.m.in NY. The companies maintain that the deal will close during the fourth quarter of 2018.

CVS and Aetna received regulatory approval for their $69 billion merger - with some conditions.

Merlo said in September that the combined Company will have more data, giving CVS a more complete picture of someone's health. A recent report by the University of California at Berkeley's Petris Center on Health Care Markets and Consumer Welfare confirms that rapid consolidation of healthcare markets in California has led to rising healthcare costs for consumers throughout the state.

Aetna previous year had tried to acquire rival insurer Humana Inc. for $34 billion, but that deal also was dropped after a federal judge blocked that merger on antitrust grounds.

Aetna last month said it would sell all of those standalone plans for prescription drugs that are part of the Medicare program for Americans aged 65 and older and the disabled to WellCare Health Plans Inc (WCG.N), paving the way for the deal's approval. Anthem Inc., whose deal to acquire Cigna Corp. was blocked a year ago, is another possible acquirer. DOJ's announcement follows a decision last month by regulators to bless a similar PBM deal involving the insurance company Cigna and Express Scripts.

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