AMA urges DOJ to challenge CVS-Aetna merger

The American Medical Association (AMA) is calling on the U.S. Department of Justice (DOJ) to stop CVS Health's planned acquisition of Aetna. "The CVS-Aetna deal is popularly described as a vertical merger involving two companies that don't operate in the same markets," said AMA President Barbara L McAneny, MD.

The American Medical Association (AMA) is calling on the U.S. Department of Justice (DOJ) to stop CVS Health's planned acquisition of Aetna. "The CVS-Aetna deal is popularly described as a vertical merger involving two companies that don't operate in the same markets," said AMA President Barbara L McAneny, MD. "But in fact, CVS and Aetna do operate as rivals in some of the same markets, raising substantial concerns that are specific to horizontal mergers. A merger of these two rivals would risk a substantial reduction of competition in the stand-alone Medicare Part D prescription drug plan market and the PBM services market." A 29-page AMA analysis concluded that the proposed merger would raise premiums due to an increase in market concentration in 30 of 34 Medicare Part D regional markets. And in 10 of those markets, "the deal would exceed a threshold set by federal antitrust guidelines for a merger that should be presumed likely to enhance market power," AMA said. The medical organization also said the proposed merger would likely increase barriers to market entry and foreclose competitors. "There is every indication that extensive vertical integration resulting from the proposed merger would raise prices, reduce choice and stifle innovation in markets for PBM services, health insurance, retail pharmacy, and specialty pharmacy," McAneny said.