AG Hood Announces Nationwide Settlement on CVS Health, Aetna Merger
Senior citizens in Mississippi and other states are now protected from potential increased prescription drug prices and reduced choices that could have resulted from the merger of CVS Health and Aetna thanks to a settlement by Attorney General Jim Hood, the U.S. Department of Justice (USDOJ) and a multistate coalition.
The agreed order requires Aetna to sell Medicare Part D plans of 1.5 million people to their competitor, WellCare Health Plans, in order to move forward with the planned merger. Prior to the agreement, the Mississippi Attorney General’s Office was concerned that the $69 billion merger would cause anticompetitive effects, including increased prices, inferior customer service, and decreased innovation in sixteen Medicare Part D regions covering twenty-two states. The complaint, filed in D.C. District Court, alleges that the loss of competition between CVS and Aetna would result in lower-quality services and increased costs for consumers, the federal government, and ultimately, taxpayers.
Based on a report by insurance regulators, the proposed merger could have otherwise made a particular impact in Mississippi but for the divestiture.
“The proposed merger would join two of the largest companies in this market: CVS, which holds the second largest market share, and Aetna, the fourth largest. Without requiring Aetna to sell off part of its business in order for the merger to go through, the consolidation could have harmed Mississippi’s most vulnerable populations, seniors ages 65 and over and people with disabilities, by reducing options and increasing healthcare costs,” General Hood said. “As part of the agreement, we will receive information that will help us monitor the impact of the merger on our older citizens and intervene if necessary.”
CVS is a nationwide drugstore chain that has grown to include pharmacy benefit management and SilverScript Insurance, and Aetna is one of the nation’s largest health insurance carriers. Under the terms of the proposed settlement, Aetna must assist WellCare in operating the business during the transition and in transferring the affected customers through a process regulated by the Centers for Medicare and Medicaid Services, an agency within the U.S. Department of Health and Human Services.
General Hood was joined in this announcement by the USDOJ and attorneys general from California, Hawai’i, Florida and Washington.