- Cigna secured approvals from New York and California to acquire Express Scripts, according to multiple reports.
Zachary Vasile of the Journal Inquirer reports that New Jersey is the remaining state whose approval will enable the completion of the Cigna-Express Scripts deal.
Approvals from California and New York should prove lucrative to both states, especially the former.
“California will now receive approximately $60 million from Cigna and Express Scripts, including $35 million for programs aimed at increasing affordability and access to health care; $10 million to support health care providers in traditionally under-served communities; and $2.5 million to fund opioid treatment and substance abuse prevention programs,” Vasile writes.
New York officials were mum on all the particulars necessary for securing its approval, but one condition stipulates that Cigna “will not receive preferential pricing from Express Scripts.” Additional conditions focus on transparency and preventing the two companies from sharing patient information illegally.
In a Hartford Business report, Joe Copper notes that the deal is likely to close by the end of the year despite a November Securities and Exchange Commission filing that set June 8, 2019, as the expected closing date.
In March, Cigna announced its plan to acquire the pharmacy benefit manager for $67 billion.
“Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers,” said Cigna President & CEO David Cordani at the time.
“This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities,” he continued. “Together, we will create an expanded portfolio of health services, delivering greater consumer choice, closer alignment between the customer and health care provider, and more personalized value.”
Doubt still hanging over CVS Health-Aetna merger
While the Cigna-Express Scripts deal continues its march forward, the proposed acquisition of Aetna by CVS Health remains under the scrutiny of a federal judge.
According to The New York Times, Judge Richard Leon of the District Court in Washington, DC, continues to voice concerns about how diligently federal regulators reviewed the acquisition.
“Judge Leon proposed assigning a government monitor to ensure the two companies remain separate, and he urged them to take steps to ‘preserve the ability to unwind CVS’ acquisition of Aetna in the event an unwinding is necessary,’” Emily Baumgaertner reports.
Lawyers for CVS Health and Aetna agreed to the judge’s request:
While the judge continues his review, the lawyers for the companies agreed to operate Aetna’s health insurance business separately, with Aetna retaining control over what it sells and its prices. The insurance company had agreed to sell off its Medicare drug plans.
Aetna employees will keep their compensation and benefits, and CVS will maintain a firewall to prevent the exchange of competitively sensitive information. The companies said they would respond to the judge’s request for monitoring later this week.
While the two companies appear to have done their part, their proposed deal has drawn Judge Leon’s ire for something outside their control. The judge raised doubts about the lack of a sufficient challenge brought forth by the Department of Justice, noting that lawyers representing the federal government were “tone deaf” and “unnecessarily defensive.”
Despite his protestations, legal experts do not anticipate that Judge Leon will suspend the merger considering the latter already received a blessing from DoJ. That said, two pharmacist association filed a motion last Friday petitioning to prevent the integration of the two companies barring a thorough examination of its potential to reduce competition in the marketplace.
Elsewhere in health payer news
The price tag for DaVita Medical Group’s sale to UnitedHealth Group has dropped by more than $500 million.
Christopher Snowbeck of the Star Tribune reports that the two sides have agreed to lower the deal from $4.9 million to $4.3 million based to increase the likelihood of approval in a recent SEC filing.
“Our combination with DaVita Medical Group is an important step in building the nation's first comprehensive, multipayer primary and ambulatory care system, focused on delivering high-quality health care and a unique consumer experience,” the payer stated publicly.