Anthem Inc. drew the battle lines Monday in defense of its proposed purchase of Cigna Corp., faulting the U.S. Justice Department for refusing to see any benefit in the $48 billion deal as the blockbuster megamerger trial opened in Washington federal district court.
In his opening statement, Anthem lawyer Christopher Curran of White & Case sought to discredit the government’s claim that the combination of the two health insurers would eliminate competition that has lowered prices, improved care and driven innovation.
A combined Anthem and Cigna, Curran said, would better position the company to compete against the market leader, UnitedHealth Group Inc., and against Aetna, whose planned $37 billion acquisition of Humana Inc. goes to court in Washington on Dec. 5.
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The Justice Department has alleged, in part, that Anthem’s acquisition of Cigna would hurt competition for millions of consumers who receive health insurance from large national employers. Antitrust enforcers sued in July to block the deal.
Curran argued Monday that large companies have the resources and sophistication to negotiate lower prices and even stitch together a network of competing insurers.
“The notion that these Fortune 500 companies will be victimized here is not realistic,” he said. Curran added: “It’s a menu selection that these companies make. There’s a variety of alternatives.”
The trial, rooted in millions of documents in discovery and more than 100 depositions, is expected to last through December.
Anthem, Cigna tension
In the buildup to trial, U.S. District Judge Amy Berman Jackson was struck by the reported discord between Anthem and Cigna. The companies have accused each other of breaching the terms of their deal.
At one hearing, Charles Rule, a Paul, Weiss, Rifkind, Wharton & Garrison antitrust partner representing Cigna, asked for permission to object to questions from Anthem. Jackson called the request “completely extraordinary.”
Curran addressed the contentiousness in court Monday, saying that disputes over of the corporate governance of the combined insurer “should not impede their ability to integrate.”
Justice Department attorney Jon Jacobs noted that even the two health insurers’ chief executives have raised questions about whether the combined company would be able to effectively wield its new negotiating power with providers.
“No one knows how these negotiations are going to wind up, because they are negotiations,” Jacobs said in court.