The $69 billion proposed acquisition of Aetna by CVS Health remains under review by the Department of Justice (DOJ), which requested the companies provide more information on their merger agreement.
“CVS Health and Aetna have been cooperating with the DOJ staff since shortly after the announcement of the Merger Agreement and are continuing to cooperate with the DOJ staff in its review of the transactions contemplated by the Merger Agreement,” CVS said in a filing with the Securities and Exchange Commission.
The request isn’t an uncommon one for federal authorities in charge of weighing antitrust concerns on big mergers and acquisitions. CVS didn’t specify what information the DOJ was seeking, but did say it “continues to expect that the transaction will be completed in the second half of 2018.
Aetna should be familiar with DOJ’s antitrust standards, as the department successfully blocked its proposed merger with Humana. That $37 billion transaction between two health insurers, however, had much more overlap than CVS and Aetna. One exception would be Medicare Part D prescription drug plans, under which CVS and Aetna combined serve 7.6 million beneficiaries—about 17 percent of total Part D enrollment.
Now being scrutinized by a new administration at DOJ, CVS and Aetna may run afoul of the goals of President Donald Trump in battling back consolidation in healthcare. An October 2017 executive order said the Trump administration would “focus on promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system.” CMS has also solicited comments from healthcare groups on how it can increase competition through reducing Medicare regulations.
The request from DOJ extends the waiting period on the CVS-Aetna transaction for another 30 days. The next big step will take place on March 20, when both CVS and Aetna shareholders will vote on whether to approve the acquisition.