US: Senator wants closer scrutiny of insurance mergers

Blockbuster health care acquisitions involving two Connecticut insurers could reduce competition in prescription drug pricing and deal a blow to consumers, Iowa’s Sen. Chuck Grassley, chairman of the Senate Judiciary Committee, said as he asked the U.S. Department of Justice to take a closer look at the corporate deals.

Regulators are reviewing a $69 billion acquisition of Hartford-based Aetna by CVS Health and the $67 billion purchase of Express Scripts Holding by Cigna in Bloomfield.

Grassley on Tuesday cited a report by the Kaiser Family Foundation detailing industry concentration. The proposed mergers of CVS Health and Aetna and Cigna and Express Scripts would result in further consolidation of the Part D marketplace, the Kaiser report said.

“If these mergers go through, four firms, the two merged firms plus UnitedHealth and Humana, would cover 71 percent of all Part D enrollees and 86 percent of stand-alone drug plan enrollees, based on 2018 enrollment,” Kaiser said.

Grassley said in a letter to Makan Delrahim, the assistant attorney general who heads the Department of Justice’s antitrust division, that over the past several years, consumers “have faced substantial increases in drug prices across the board.”

He warned that the transactions would result in substantial integration with insurance companies in the pharmaceutical supply chain. The three largest pharmacy benefit managers, which help employers manage costs, are integrated with insurance companies, Grassley said.

In June, the American Medical Association (AMA), the nation’s largest physician organization, asked government regulators to oppose the CVS-Aetna merger, which insurance officials have said is on pace to close in the second half of this year. The California Insurance Commissioner has said it wants the Justice Department to block the CVS-Aetna merger out of fear the deal will increase health insurance costs and limit market competition

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