Major health industry deals said to move closer to approval

Two major healthcare deals that stand to reshape the insurance and pharmacy industries are moving toward winning antitrust approval.

The approvals by a federal agency are expected to be the final step as the takeovers head toward completion, according to a person familiar with the combinations.

The Department of Justice is on track to soon approve the acquisition of pharmacy-benefit manager Express Scripts Holding by health insurer Cigna, as well as CVS Health’s takeover of insurer Aetna, said the person, who asked not to be identified because the process is private.

CVS and Aetna are in talks with the Justice Department about divesting Medicare prescription drug plans to resolve the government’s concerns the deal will otherwise harm competition. The Cigna-Express Scripts deal may not require any divestitures, said the person.

CVS-CROP-5.jpg
Pedestrians pass in front of a CVS Health Corp. store in downtown Los Angeles, California, U.S., on Friday, Oct. 27, 2017. Photographer: Christopher Lee/Bloomberg

“We continue to constructively work with the Department of Justice and remain confident the deal will close by the end of the year,” said Brian Henry, a spokesman for Express Scripts.

Representatives for the Justice Department, CVS and Aetna declined to comment. A Cigna spokesman didn’t return requests for comment.

CVS announced its $68 billion deal for Aetna late last year. The deal would combine CVS’s drugstores and pharmacy-benefits management unit with the third-biggest U.S. health insurer. Cigna announced its $54 billion deal for Express Scripts in March.

Both deals are vertical transactions, meaning they join companies that operate at different levels of the supply chain. Bloomberg reported in August that antitrust regulators didn’t find vertical-competition concerns in evaluating the CVS-Aetna deal.

The Wall Street Journal reported on the approval process earlier Wednesday.