M&A News

Forbes reports that the U.S. Justice Department today "has cleared [from an antitrust law perspective] the pending merger [ of Cigna and Express Scripts], "terminating the applicable waiting period" following a six-month review.  The Justice Department explains

In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals.  PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.  

The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small.  The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.  

In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction. 

Forbes notes that "The Cigna-Express Scripts deal still faces scrutiny in several states. Two weeks ago, Cigna said 14 of 29 states have signed off on the merger." But this is a big boost toward closure.

The Justice Department continues to consider the CVS Health acquisition of Aetna. Fierce Healthcare reports on CVS Health Chief Executive Officer Larry Merlo's recent comments on that pending transaction.

Fierce Healthcare informs us about ongoing merger talks between Walmart and Humana.

"We continue to explore opportunities with them, we'll do that," [Humana Chief Financial Officer Brian] Kane said. "I genuinely don't know the answer to that question yet, I think we're going to learn more in relatively short order." 

The conversation on Friday also provided plenty of details about Humana's emerging partnership with Walgreens, where it plans to add providers and "health advisers" in pilot stores in Kansas City.  These providers—employed by Partners in Primary Care, which is Humana's wholly owned clinic brand—will be set up in a risk-based relationship with Humana's members so they can seek care directly at the pharmacy.