The Department of Justice has approved a merger between CVS Health, the nation’s largest pharmacy, and and Aetna, the U.S.’s third largest health insurance provider. CVS Health will acquire Aetna for $69 billion. The CVS Aetna merger would be one of the biggest of its kind.
Aetna to divest Part D plans
As part of the deal, Aetna will sell its Part D services to WellCare Health Plans, and no longer offer Part D plans. If you already have a Part D plan through Aetna, you can still keep it through 2019. Aetna’s Medicare Advantage plans will remain the same.
The merger will allow certain CVS stores to offer health coverage and medical care. CVS will now have information on more customers and more control over the healthcare process.
Detractors worry that big mergers like this one will only decrease competition and send the drug prices up, giving consumers less control. CVS Health President and CEO Larry Merlo stated, however, “Together, we will help address the challenges our health care system is facing, and we’ll be able to offer better care and convenience at a lower cost for patients and payors.”
With larger mergers such as the CVS Aetna merger, it can take several years before the companies are fully integrated and the benefits start becoming evident.
New York State considers blocking merger
New York State is currently considering blocking part of the CVS-Aetna merger. Maria Vullo, Superintendent of the New York Department of Financial Services, called the deal “myopic” and believes the merger to be dangerous for drug prices and competition. Vullo wants CVS and Aetna to agree:
- not to raise insurance premiums in New York, and
- to state regulation of CVS’s pharmacy benefits manager.
In August, the state of California also urged the U.S. Department of Justice to stop the deal.
Assuming CVS and Aetna agree to New York state’s terms and New York approves it, the merger is expected to close by the end of the year.