- The Department of Justice is getting close to approving two healthcare megamergers, The Wall Street Journal reported Wednesday.
- The mergers – one between the pharmacy CVS Health and the insurer Aetna, and the other between the insurer Cigna and the pharmacy benefit manager Express Scripts – were announced at the end of 2017 and in March, respectively.
- Express Scripts was up as much as 4% on the report.
- Cigna, Aetna, and CVS were all up at least 1%.
Two massive healthcare mergers are about to get the green light from the Justice Department, according to The Wall Street Journal.
The Journal reported Wednesday that the DOJ was nearing an approval of the pharmacy CVS Health’s $69 billion merger with the insurer Aetna, announced at the end of last year, as well as the insurer Cigna’s $67 billion deal with the pharmacy benefit manager Express Scripts, announced in March.
Express Scripts was up as much as 4% on the report, while Cigna, Aetna, and CVS were all up at least 1%
The mergers would redraw the lines around what defines healthcare companies. A combined CVS and Aetna would create a new company containing numerous healthcare businesses, including a health insurer, a retail pharmacy, and a pharmacy benefit manager, which negotiates prescription-drug prices with drugmakers. Meanwhile, Cigna’s deal with Express Scripts would end the days of the standalone PBM by combining it with an insurance business.
The deals have received additional scrutiny from the DOJ, which requested more information from both sets of companies.
The Journal reported that CVS and Aetna might be required to sell certain businesses related to Medicare drug coverage in order for the merger to go through, while a Cigna-Express Scripts deal would be unlikely to come with similar requirements.
In August, Cigna and Express Scripts shareholders voted to approve the deal, which had briefly been in jeopardy after the billionaire Carl Icahn came out against it, saying that it “may well rival the worst acquisitions in corporate history.” He ultimately reversed course.
- Markets Insider