June 25, 2018
Area(s) of Interest: Advocacy
The American Medical Association (AMA) has urged regulators to block the proposed acquisition of health insurer Aetna by retail pharmacy and pharmacy benefit manager CVS Health. After conducting an exhaustive analysis, AMA found evidence of the merger’s likely anticompetitive effects on Medicare Part D, pharmacy benefit management services, health insurance, retail pharmacy and specialty pharmacy.
AMA President Barbara L. McAneny, M.D., announced AMA’s opposition to the CVS-Aetna deal at a hearing held Tuesday by the California Department of Insurance (CDI).
“After very careful consideration over the past months, the AMA has come to the conclusion that this merger would likely substantially lessen competition in many health care markets, to the detriment of patients,” said Dr. McAneny. “AMA is now convinced that the proposed CVS-Aetna merger should be blocked.”
Over the past six months, AMA conducted an intense evaluation of the proposed CVS-Aetna merger, and sought the views of prominent academic experts in health economics, health policy and antitrust law.
AMA will also file a post-hearing memorandum outlining its concerns later this month that will outline the merger’s potential negative consequences for health care access, quality and affordability, including:
- An expected increase in premiums due to a substantial increase in market concentration in 30 of 34 Medicare Part D regional markets.
- An anticipated increase in drug spending and out-of-pocket costs for patients as Aetna and CVS fortify their dominant positions in the health insurance, pharmaceutical benefit management, retail and specialty pharmacy markets that already lack competition.
- A reduction in competition in health insurance markets that will ultimately adversely affect patients with higher premiums and a reduction in the quality of insurance.
- A foreseeable failure to realize proposed efficiencies and benefits because the merger faces enormous implementation challenges, and those efficiencies have a questionable evidence base.
“What the AMA heard from nationally recognized experts at today’s California hearing corroborates the AMA’s analysis and conclusions regarding the negative impact of the CVS-Aetna merger,” said Dr. McAneny. “Thanks to Insurance Commissioner Jones’ decision to hold this hearing, federal and state antitrust officials now have powerful reasons to block this harmful merger and foster a more competitive marketplace that will operate in patients' best interests.”
The California Medical Association (CMA) has also expressed concern over the deleterious, anticompetitive effects that could result out of the proposed merger between Aetna and CVS, both behemoths in their respective industries. CMA submitted written comments on Friday, urging CDI to block the merger.
“CMA remains concerned that the proposed merger between Aetna and CVS health would result in reduced competition, higher prices and more constrained access to health care, which could be especially harmful to California patients and consumers,” said CMA President Theodore M. Mazer, M.D.