Dive Brief:

• The American Medical Association pushed against the CVS Health-Aetna deal during a hearing on the proposed acquisition in San Francisco Tuesday, warning it will would lead to “likely anti-competitive effects on Medicare Part D, pharmacy benefit management services, health insurance, retail pharmacy and specialty pharmacy.”
• Kristen Miranda, Aetna’s president of California and the head of the west territory, and Thomas Moriarty, CVS Health’s EVP, defended the merger’s potential benefits,

• including reducing healthcare costs, improving care coordination and helping patients with chronic illness, such as diabetes.

• AMA President Barbara McAneny said that the doctors’ group researched the matter for months, speaking to academic experts and others, but concluded the merger would lessen competition in many healthcare markets.

Dive Insight:

The $69 billion proposed CVS buy of Aetna is expected to close in the second half of the year. CVS and Aetna shareholders backed the purchase earlier this year. Company officials appeared before Congress in late February to discuss the deal and the Department of Justice is reviewing the purchase and its potential ramifications.

On Tuesday, California Insurance Commissioner Dave Jones held a hearing on the proposed deal, making it clear he has no decision-making power but wanting to give outside groups a forum to weigh in.

CVS and Aetna officials trumpeted potential cost savings in the deal. Moriarty said the merger could save $750 million in the first two years. He also spoke of the potential of CVS pharmacists taking a more active role in healthcare. Patients see their pharmacists more than they see their doctor. Moriarty said pharmacists could play a key role in complementing a doctor’s care.

Despite CVS and Aetna’s contentions, AMA President Barbara McAneny said that the doctors’ group ultimately concluded the merger would lessen competition in many healthcare markets.

“The AMA is now convinced that the proposed CVS-Aetna merger should be blocked,” McAneny said at the hearing.

The problems the AMA listed include:

• A possible increase in premiums connected to an increase in market concentration in 30 of 34 Medicare Part D regional markets.
• An anticipated increase in drug spending and out-of-pocket costs.
• A reduction in competition in health insurance markets that could lead to higher premiums and a reduction in the quality of insurance.
• The companies won’t be able to realize the efficiencies and benefits they’ve promised in the deal.

Other speakers also discussed concerns with the proposal, including worries about competition and what it will mean for consumers.

Supporters of the deal note the vertical merger will not raise the same competitive concerns cited in the DOJ’s opposition to Aetna’s proposed pact with fellow payer Humana in 2017. The CVS-Aetna deal is not the only vertical integration being discussed by a major payer. Humana is reportedly in early talks with Walmart on a deal that may involve strengthening partnerships or could even involve a purchase of the payer. And Express Scripts and Cigna are in the process of an attempted merger also.

The industry is watching the CVS-Aetna deal closely and whether the federal government will allow the purchase. If the vertical deal goes through, other payers and major companies will likely intensify talks for their own mergers. 

including reducing healthcare costs, improving care coordination and helping patients with chronic illness, such as diabetes.

“reducing healthcare costs” can simply be had by providing less care and/or having more and more care being provided by mid-level practitioners – ARNP, PA, NP

“improving care coordination” could mean that those pts having Aetna insurance will be locked into using CVS provided care thru their in store clinics “nurse-in-a-box” and required all prescriptions be filled at a CVS store and/or thru their mail order service ?

I wonder  if pts dealing with “chronic pain” will be considered “worthy” of getting help in managing their pain ?