Court issues full opinion blocking Anthem's acquisition of Cigna

The U.S. District Court for the District of Columbia yesterday issued its full opinion blocking Anthem’s proposed acquisition of Cigna, which would have reduced the number of major national health insurers from five to four. As noted in the Feb. 8 order blocking the deal, U.S. District Judge Amy Berman Jackson said the Department of Justice and states “carried their burden to demonstrate that the proposed combination is likely to have a substantial effect on competition in what is already a highly concentrated market.” While Anthem contends that any anticompetitive effects will be outweighed by the efficiencies the deal will generate, she said “the claimed medical cost savings are not cognizable efficiencies since they are not merger-specific, they are not verifiable, and it is questionable whether they are ‘efficiencies’ at all. And the projected [general and administrative] efficiencies suffer from significant verification problems as well.” In addition, she said Cigna officials “provided compelling testimony undermining the projections of future savings, and the disagreement runs so deep that Cigna cross-examined the defendants’ own expert and refused to sign Anthem’s Findings of Fact and Conclusions of Law on the grounds that they ‘reflect Anthem’s perspective’ and that some of the findings ‘are inconsistent with the testimony of Cigna witnesses.’”