The Department of Justice has approved the merger of CVS and Aetna

The Department of Justice has approved the merger of CVS and Aetna

The Department of Justice has approved the merger of CVS and Aetna

(NYSE: WCG) for the divestiture of Aetna's standalone Medicare Part D prescription drug plans, which have an aggregate of approximately 2.2 million members. Affiliations with large insurers could change that dynamic, he added.

The Aetna acquisition is among the most significant health-care mergers of the past decade, combining one of the top USA drugstore chains with the third-biggest health insurer. The approval marks the close of an era, during which powerful pharmacy benefit managers brokered drug prices among pharmaceutical companies, insurers and employers.

However, notable industry members such as the American Medical Association (AMA) and the American Antitrust Institute (AAI) have spoken out against the merger and called for the DOJ to block the transaction prior to its announcement this week. "Our shareholders will benefit from the depth of their knowledge of Aetna's business and their complementary expertise, which will be essential to the combined company as we transform the way health care is delivered in America".

However, the CVS/Aetna merger will result in the only USA firm that combines retail pharmacies, a pharmacy benefit manager, and a health insurer. The approval is contingent upon the sale of Aetna's Medicare Part D Individual Prescription Drug business to WellCare, which Aetna recently announced it was prepared to do to gain regulatory approval. It could also help steer Aetna customers into stores to shop.

"DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer health care experience", said CVS Health president and chief executive officer Larry Merlo.

Additionally, the DOJ has informed Aetna that it must enable WellCare to hire employees who are employed by this division.

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CVS Health Corp. and Aetna Inc. can go ahead with their about $68 billion deal, the Justice Department said, clearing the way for a merger that will create a health-care giant with a hand in insurance, prescription-drug benefits and drugstores across the U.S.

Going forward, CVS and Aetna are working to complete the remaining state reviews, and CVS believes the merger is on track to be completed in the early part of this quarter.

Completion of the CVS-Aetna deal could put pressure on rivals to come up with their own deals. Walgreens holds a 26 percent stake in drug distributor AmerisourceBergen Corp., which helps supply Walgreens stores, and last winter the companies held early discussions about a merger, according to reports at the time.

Humana Inc., whose deal to merge with Aetna was blocked on antitrust grounds past year, is another potential deal-maker.

Consolidation has risen across health care among hospitals, drugmakers and insurers. Anthem Inc., whose deal to acquire Cigna Corp. was blocked a year ago, is another possible acquirer.

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