U.S. judge approves CVS purchase of insurance company Aetna

WASHINGTON (Reuters) – A federal judge reviewing the Department of Justice to allow the US pharmacy chain and distribution manager CVS Health Corp ( CVS.N ) to merge with health insurer Aetna on Wednesday said the deal was actually legal under the antitrust law.

Judge Richard Leon of U.S. District Court for The District of Columbia had investigated a government plan announced in October to allow mergers, provided Aetna sells its Medicare plan business with Medicare prescription to WellCare Health Plans Inc ( WCG.N ). Both offers are already closed.

Leon initially wanted to approve the terms of the merger and insisted on hearing from critics of the agreement, but ultimately decided to approve the proposal to approve the consent agreement.

But he objected to the usual practice of the corporations closing multi-billion dollar agreements while the legal process required by the Tunney Act was still in process.

"If the Tunney Act is to mean anything," Leon wrote, "it must surely mean that no court should rubber up a consent decree approving the merger of one of the largest corporations in the United States. 39; the country's third largest health insurance company, & # 39; … just because the government asks for it! & # 39;

In December, Leon said he was "less convinced" than the government that the sale of assets to WellCare would Since then, Centene Corp. ( CNC.N ) agreed to acquire WellCare for $ 15.27 billion.

Assistant Attorney General Makan Delrahim, head of the Justice Department's antitrust division, said he was pleased with Leons

CVS said that the judge's decision reinforced that CVS and Aetna have already merged.

"CVS Health and Aetna have been one company since November 2018, and today's action from the district court makes it 100 percent clear. We remain focused on to transform up consumer health services in America, ”says CVS spokesman T.J. Crawford said in an email statement.

Critics of the CVS-Aetna agreement included the American Medical Association and the AIDS Healthcare Foundation.

Another critic, U.S. PIRG, expressed skepticism that savings from the merger would end up in consumers' pockets.

"Again and again, CVS Caremark has used its market power to both increase the cost of medicines for consumers and tear down the authorities, rather than giving the savings they promised to consumers," PIRG said in a statement.

Pending Leon's approval, CVS agreed to temporarily allow Aetna to make critical product, pricing and personnel decisions independently of one another.

CVS has been converting to health care and said in June that it would offer expanded health services such as nutritional counseling and blood pressure screening in 1500 stores by the end of 2021.

Most consent agreements strike antitrust agencies with companies to resolve Competition issues are approved by federal courts with little fuss under the Tunney Act of 1974, which requires the courts to ensure that the agreements are in the public interest.

Companies generally do not wait for final court approval until they complete their transactions.