Justice Department clears Cigna-Express Scripts deal to proceed
Antitrust enforcers signed off on Cigna’s $54 billion takeover of pharmacy-benefit manager Express Scripts.
Approval by the Justice Department smooths the way for the deal to wrap up by the end of the year, the companies said Monday in a joint statement. While some state regulators have yet to sign off, the federal review was one of the last major steps for the agreement the companies struck in March.
Insurers, pharmacy benefit managers and others in the healthcare supply chain have been making deals to streamline expenses and gain scale in an industry threatened by rising costs for medical services and new competition from the technology sector.
Cigna’s deal for Express Scripts came on the heels of CVS Health’s estimated $68 billion deal to buy insurer Aetna, which is still under review. That combination would unite the U.S. drugstore giant with the third largest health insurer. CVS also manages drug benefits plans for employers and insurers, a business that could help steer Aetna’s customers into CVS drugstores when they fill a prescription.
Ana Gupte, an analyst at Leerink Partners, said approval of the Express Scripts deal is a positive sign for CVS and Aetna. That’s because it indicates that the Justice Department likely isn’t concerned about consolidation among insurers and pharmacy-benefit managers, which aren’t direct competitors.
Bloomberg reported earlier this month that CVS and Aetna are in talks with the Justice Department about divesting Medicare prescription-drug plans to resolve the government’s concerns the deal would harm competition.
The Justice Department didn’t put any conditions on the Cigna-Express Scripts deal, the companies said in a joint statement. The Justice Department declined to comment.
“We are pleased that the Department of Justice has cleared our transaction and that we are another step closer to completing our merger and delivering greater affordability, choice and predictability to our customers and clients as a combined company,” Cigna’s Chief Executive Officer David Cordani said in a statement.