Department of Justice Will Take Up Cigna-Express Scripts Merger

The healthcare industry’s consolidation drag race will have a referee after all.

The healthcare industry’s consolidation drag race will have a referee after all.

Bloomberg is reporting that Cigna’s proposed takeover of pharmacy benefits manager (PBM) Express Scripts would be reviewed by the Department of Justice (DoJ). Express Scripts CEO David Cordani apparently said as much during a recent meeting in Europe, and the news came to light from an alert that financial services firm Credit Suisse sent to its clients earlier this month.

There’s no word on when that appraisal would take place or if it is currently underway. Cigna told the publication in a statement that it was “optimistic” that the deal would be approved.

Antitrust advocates have opposed the $54 billion deal, which was first announced in March. They believe that continued vertical integration in the healthcare space will hurt consumer options and lead to an anticompetitive marketplace. The American Antitrust Institute (AAI) recently issued a letter urging the DoJ to block both that merger and CVS’s proposed purchase of insurance giant Aetna. Both deals would involve the combination of a large PBM—of which there are few—with a major insurance company.

“Stronger incentives to exclude rival PBMs and health insurers and to engage in anticompetitive coordination would harm competition and consumers at all levels,” the letter said, arguing that the 2 deals should face a high regulatory hurdle. Less than a week after it was issued, speculation emerged that Walmart would try to buy Humana.

It’s unknown whether Walmart—itself on of the country’s largest retail pharmacies—will formally attempt to acquire the insurer—which also controls a PBM of its own. Any DoJ action in the Cigna-Express Cripts case could have implications for Walmart’s decision, or for the CVS-Aetna move. In February, it was reported that the agency had requested further information on that merger.

“It’s just coming at us fast and furious, with CVS and Aetna, Cigna and Express Scripts, and maybe [Walmart and Humana],” AAI President Diana Moss, PhD, told Healthcare Analytics News™ in March. “I think the relevant takeaway is that if these deals were all to go through, even with whatever remedies DoJ would put into place, we’re talking about a massive restructuring of the industry.”

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