A federal judge has signed off on a settlement between the Department of Justice, CVS Health and Aetna, ending a months-long review of the merger deal.
District of Columbia Judge Richard Leon has been reviewing the agreement that paved the way for the megamerger since December, when he expressed concern about being treated as a "rubber stamp" for the $69 billion deal. In an order (PDF) filed Wednesday evening, Leon said that the deal is in the public interest and would not be anticompetitive in either the payer or retail pharmacy markets.
In the DOJ settlement, Aetna agreed to sell off its Medicare Part D business to WellCare Health Plans. With that divestiture, DOJ argued that the deal resolved its anticompetitive concerns. Five state attorneys general also backed the settlement agreement.
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Though Leon did allow CVS and Aetna to begin integration during his review, much of the process was unprecedented. He allowed court hearings where opponents of the deal, including the American Medical Association, testified about the potential risks.
However, Leon said in Wednesday's filings that their argument was ultimately unpersuasive.
In a statement, CVS Health said it remains "focused on transforming the consumer health care experience in America."
"CVS Health and Aetna have been one company since November 2018, and today’s action by the district court makes that 100 percent clear," CVS said in the statement.
American Medical Association (AMA) President Patrice A. Harris, M.D., said in a statement that the decision "ultimately fails patients, will likely raise prices, lower quality, reduce choice, and stifle innovation." She urged regulators to closely monitor anticompetitive behavior within the combined CVS-Aetna.
“Although this outcome is not what we fought for, the AMA is optimistic that this case and the thorough examination of its underlying facts are a sign of things to come," Harris said. "When the public interest is harmed by health care mergers, courts charged with scrutinizing DOJ merger settlements must not be a rubber stamp.”