The top insurance official in California urged the US Justice Department (DOJ) to block the merger of retail pharmacy chain CVS Health and health insurance company Aetna, saying it would “have significant anti-competitive impacts on American consumers and health care and health insurance markets.”
The findings and recommendation by California Insurance Commissioner Dave Jones doesn’t derail the effort by CVS Health to buy Aetna, but the state regulator could have influence with the DOJ as it evaluates the deal. California’s insurance regulator described the DOJ’s evaluation of the Aetna-CVS deal as “open,” and outlined his reasoning for the DOJ to block it in a 15-page letter.
“The proposed merger of CVS and Aetna will significantly reduce competition in the PBM and Medicare Part D markets, affecting millions of health care consumers throughout the country,” the California Insurance Commissioner said in a statement Wednesday afternoon, August 1. “A merger of this size and type, according to experts on health insurer and health care mergers, will likely lead to increased prices and decreased quality.”
The decision came following a hearing in June that included testimony from medical care providers like doctors from the American Medical Association who urged the regulator to stop the deal. CVS and Aetna executives also testified at the hearing.
“We urge other state regulators to review the evidence and take similar action,” AMA president Dr. Barbara McAneny said Wednesday after news of the California Insurance Commissioner’s decision broke.
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