The Association of American Physicians and Surgeons (AAPS) wrote a letter to Attorney General Jeff Sessions in opposition to the $69 billion merger of CVS Health and Aetna. The transaction is currently in the regulatory process with regulators and the Department of Justice Antitrust Division and brings together a major insurance player and one of the nation’s largest pharmacy benefit managers.
Several industry stakeholders have spoken up about the deal, voicing concerns the combined entity will reduce competition in the PBM space and potentially increase prices for consumers. The American Medical Association, the largest association of physicians, also expressed the deal should be blocked.
"Mergers can decrease competition and such mergers are not in the interest of our patients," AAPS President-elect Marilyn Singleton, MD, JD, wrote in the letter. “This merger combines the third-largest health insurer and the largest national pharmacy chain, which has the dominant PBM, CVS Caremark. This merger is particularly troubling in light of the highly concentrated national market for PBM services and current lack of transparency in drug pricing and PBM contracts."
The organization fears the merger will steer patients away from physicians to insurance plans and sites of care, as “experience has shown.”
Standalone and independent PBMs will struggle in wake of the deal, the organization alleged. Consumers could also see higher prices for prescription drugs.
“As a PBM, CVS will have less incentive to keep down the cost of prescription drugs and other health care costs for other health insurers competing with Aetna,” the letter reads.
AAPS cited Humana steering patients to Walmart primary care clinics as an example of the competition-limiting behavior of major partnerships and mergers. The organization further alleges that CVS has “demonstrated a pattern of anticompetitive behavior.”
“Allowing this merger to proceed will hand the combined CVS/Aetna even more clout to drive up costs without any corresponding benefit to patients,” the letter concludes. “It would enable, not hinder, continued anticompetitive tactics that squeeze competitors out of business and steer patients toward CVS/Aetna-controlled products, away from alternate sources of care like their trusted independent pharmacists, pharmacies and physicians.”
In a positive signal that the CVS-Aetna deal will be cleared, Cigna’s $67 billion acquisition of PBM Express Scripts was approved by the DOJ, which declared the transaction will not have a significant impact on limiting competition. CVS and Aetna may need to divest some assets related to Medicare Part D prescription drug plans before the merger is approved, according to reports.
CVS executives have been bullish that the deal will close in the fourth quarter of 2018. CVS CEO Larry Merlo has also relayed plans to increase accessibility of community-based care to patients and consumers of its pharmacy retail business in a new care model.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."