AMA: CVS-Aetna merger should be blocked
The American Medical Association distributed the following press release on June 19…
The American Medical Association (AMA) will today announce that after conducting an exhaustive analysis on the proposed acquisition of Aetna by CVS Heath, the nation’s largest physician’s organization urges regulators to block the merger. The AMA position is based on evidence indicating the merger’s likely anticompetitive effects on Medicare Part D, pharmacy benefit management services, health insurance, retail pharmacy, and specialty pharmacy.
The announcement will be made by AMA President Barbara L. McAneny, M.D., in testimony on the proposed CVS-Aetna deal at a hearing held today by the California Department of Insurance.
“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,” Dr. McAneny will say during testimony to California Insurance Commissioner David Jones. “The AMA is now convinced that the proposed CVS-Aetna merger should be blocked.”
Since December, the AMA has conducted an intense evaluation of the proposed CVS-Aetna merger, and urged state and federal regulators to do the same. During its merger analysis, the AMA sought the views of prominent academic experts in health economics, health policy and antitrust law.
The AMA will file a post-hearing memorandum outlining its concerns later this month. The AMA filing 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.”
To ensure patients are better served by dynamic and competitive health care markets, the AMA will endeavor to persuade federal and state regulators to oppose the merger.