House Holds Hearing on Proposed CVS Health-Aetna Merger

The House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing yesterday on CVS Health’s proposal to acquire health insurance company Aetna. CVS Health operates retail pharmacies, walk-in medical clinics, a pharmacy benefits management business, senior pharmacy care business and Medicare Part D prescription drug plans. Aetna provides commercial, Medicare and Medicaid health insurance products to 22.2 million people. Witnesses at the hearing included representatives from CVS Health and Aetna, Northwestern University’s Health Enterprise Management Program, NERA Economic Consulting, Consumers Union, and the International Center for Law and Economics. The witness from Consumers Union raised some concerns about the deal, warning that “[c]ombining these two giants would create an even bigger giant, and perhaps more importantly, would combine them into a new corporate structure, straddling more market sectors and creating new and potentially far-reaching profit-maximizing incentives….”  The CVS witness defended the deal, testifying that the companies’ combination of “capabilities will allow us to better help patients prevent and manage illness and to improve and simplify how we deliver care. In short, we are combining our retail savvy and community presence with a health care company to engage and put the consumer at the center of all health care decisions.” Just last year Aetna’s proposed combination with another insurer, Anthem, was blocked by a federal court on the grounds that it endangered robust competition.