AMA Calls for Block of CVS Health, Aetna Merger

June 20, 2018
Samantha DiGrande

The American Medical Association (AMA) has announced that, after assessing the proposed $69 billion merger between pharmacy benefit manager CVS Health and insurer Aetna, the organization is calling for regulators to block the transaction.

The American Medical Association (AMA) has announced that, after assessing the proposed $69 billion merger between pharmacy benefit manager (PBM) CVS Health and insurer Aetna, the organization is calling for regulators to block the transaction. The AMA has conducted an analysis of the merger since December 2017 and has sought the opinions and input of academic experts in health economics, health policy, and antitrust laws.

The president of the AMA, Barbara L. McAneny, MD, outlined the AMA’s reasoning behind the organization’s position in a hearing held by the California Department of Insurance. The position is based on evidence the AMA has found that the merger would have anticompetitive effects on Medicare Part D, PBM services, health insurance, retail pharmacy, and specialty pharmacy.

“After very careful consideration over the past months, the AMA has come to the conclusion that this merger would likely substantially lessen competition in many healthcare markets, to the detriment of patients,” said McAneny during her testimony. “The AMA is now convinced that the proposed CVS-Aetna merger should be blocked.”

The AMA will file a post-hearing memorandum compiling all of its concerns and the potential negative consequences of the merger; including an increase in premiums because of the consolidation in 30 Medicare Part D regional markets, an increase in drug spending and out-of-pocket costs for patients, a decrease in competition in health insurance markets, and the logistical difficulties of the merger.

In a statement to Forbes made yesterday, CVS said, “This combination does not further concentrate the healthcare sector; instead it reconfigures it to bring together disparate parts of the healthcare system that today lead to inefficient, ineffective, and more costly care.”

AMA, the nation’s largest physician association, looks to further address its concerns with federal and state regulators.

“Thanks to [California] Insurance Commissioner [David] Jones’ decision to hold this hearing, federal and state antitrust officials now have powerful reasons to block this harmful merger and foster a more competitive marketplace that will operate in patients’ best interest,” said the organization in a statement.

The AMA is not the first body to raise concerns about the deal, as the American Antitrust Institute (AAI) urged the Department of Justice (DOJ) to block the merger in March 2018, citing its belief that 3 integrated PBM-insurer systems would dominate the marketplace and effectively lock out competition.