Regulators in New York state today gave CVS Health Corp. the final regulatory approval the company needed to acquire Aetna Inc.
CVS — a Woonsocket, Rhode Island-based drug store chain and pharmacy benefits manager (PBM) founded in 1964 — said that it now expects to close on its acquisition of the health insurer Wednesday.
Maria Vullo, the New York State financial services superintendent, said in a ruling on the deal released today that she does not believe that CVS has provided a clear, concrete plan for making sure that the deal reduces costs or improves health outcomes for Empire State residents.
But Vullo said that she has the authority to affect only a small part of the deal in connection with her concerns, not the deal as a whole.
The New York department “has determined that obtaining commitments from CVS Health and Aetna Inc. to address these concerns better serves the people of the state of New York than would disapproval of the application,” Vullo said.
Vullo said she has tried to increase the odds that the deal will be good for New York state residents by setting a number of conditions. The conditions include commitments from CVS that:
- No funds from any Aetna company or affiliate covering New Yorkers will be used to pay for the deal.
- CVS cannot increase premiums or cost-sharing amounts for New Yorkers to pay for the deal.
- Aetna cannot pay dividends to CVS without prior approval from New York state regulators for at least three years.
- The Aetna products now available in New York state must continue to be available for at least three years.
The New York department “will use all regulatory tools, including special reports, to review the past and future conduct of CVS Health, CVS Pharmacy, and CVS Caremark, as well as Aetna Inc. and its affiliates, and take every action necessary to ensure that the representations made in the course of this approval were fully accurate and that the parties keep all commitments made,” the department said in a press release announcing Vullo’s ruling.
The Aetna life and health business was founded in 1853.