The American Antitrust Institute (AAI) sent a letter to the US Department of Justice on Monday, March 26, urging the agency to block CVS’ planned purchase of Aetna, saying the deal would result in higher prices and lower quality in the prescription drug and health insurance markets.
The AAI wrote to express concern that the proposed merger of the retail pharmacy chain/pharmacy benefits manager (PBM) CVS Health and health insurer Aetna will potentially harm competition and consumers. The letter adds to the concerns raised by other important voices, including the American Medical Association and Consumers Union. The Institute notes that at the time writing the letter, the parallel merger of the PBM Express Scripts and health insurer Cigna was recently announced.
The Institute wrote “while vertical mergers do not eliminate rivals and increase market concentration, they can enhance the ability and/or incentive for a merged firm to behave in ways that harms competition at a horizontal level.”
The AAI also aims to provide some additional analysis of the competitive implications of both mergers and the resulting restructuring of key segments of the healthcare industry that they would bring about.
Full Content: Antitrust Institute
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