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October 10, 2018 at 02:42 PM
The U.S. Department of Justice today agreed to clear any federal antitrust barriers to CVS Corp.’s proposed $69 billion acquisition of Aetna Inc., if Aetna goes ahead with a previously announced agreement to sell its individual stand-alone Medicare Part D prescription drug plan program to WellCare Health Plans Inc.
The department posted copies of a consent decree and other documents that show what Aetna has to divest to resolve antitrust division objections to the CVS deal.
In addition to sell the individual Medicare drug plan operation to WellCare, Aetna must let WellCare hire the key employees associated with that operation; help WellCare operate the business during the transition; and work with the Centers for Medicare and Medicaid Services to develop a process for transferring its 2.2 million drug plan enrollees into the WellCare plans.
(Related: Dear Connecticut: CVS Can’t Afford Aetna. Sincerely, New York)
CVS and Aetna said in their announcements about the consent decree that the decree lets them complete their deal before Aetna completes the deal with WellCare.
Copies of the documents are available here.
CVS and Aetna said they expect to complete the deal “in the early part of the fourth quarter of 2018.” The fourth quarter started Oct. 1.
CVS is a large, Woonsocket, Rhode Island-based provider of pharmacy and pharmacy benefit management (PBM) services. It also offers Medicare Part D drug plans, and it operates a large network of retail health care clinics in its stores.
Aetna, which is based in Hartford, Connecticut, has been a major provider of commercial health coverage and Medicare plan coverage.
The antitrust ruling means that the biggest remaining obstacle to completion of the CVS-Aetna deal is the need for the parties to get the approval of Katharine Wade, the Connecticut insurance commissioner.
The companies also need to clear the deal with New York state insurance regulators.
What will Connecticut do about the CVS-Aetna deal?
New York state insurance regulators have told Wade that they believe CVS is taking on too much debt to pay for Aetna, and that the debt burden could hurt the quality of Aetna coverage and increase the cost of Aetna coverage.
The Connecticut Insurance Department held a hearing on the deal Thursday.
CVS pleased many in Connecticut by pledging to keep Aetna’s headquarters in Connecticut for at least 10 years.
