AMA Opposition to the CVS-Aetna Vertical Merger Grows With Statement to DOJ

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The American Medical Association has released a statement urging the US Department of Justice to block the CVS-Aetna merger.
The American Medical Association has released a statement urging the US Department of Justice to block the CVS-Aetna merger.

After months of research, the American Medical Association (AMA) has released a statement urging the US Department of Justice to block the CVS-Aetna merger, despite multiple other healthcare groups praising the forthcoming partnership.1

The AMA spent several months evaluating the terms of the agreement and consulting with health policy and antitrust experts in the field. They came to the conclusion earlier this month that the merger would ultimately endanger the competitive healthcare marketplace and lead to high costs for patients.

“The CVS-Aetna deal is popularly described as a vertical merger involving two companies that don't operate in the same markets,” wrote AMA President Barbara L McAneny, MD, in the statement. "But in fact, CVS and Aetna do operate as rivals in some of the same markets, raising substantial concerns that are specific to horizontal mergers. A merger of these two rivals would risk a substantial reduction of competition in the stand-alone Medicare Part D prescription drug plan market and the pharmacy benefit management services market.”

The AMA analysis found that the partnership could also decrease competition for local pharmacies and health insurance agencies.

Quality of care is a concern as well. The AMA says they expect the CVS-Aetna merger could lead to increased premiums, drug spending, and out-of-pocket expenses for patients.

Some other voices in health care have offered more positive views of the partnership, including Leemore Dafny, PhD, in a piece published in the New England Journal of Medicine.2

The CVS-Aetna merger “aims to be a ‘new front door to health care in America,' aggressively expanding the scope of services supplied in its in-store Minute Clinics,” Dr Dafny wrote. “To stay relevant, CVS intends to offer a different value proposition to patients. For this effort to pay off, that proposition must be better than what existing providers currently offer — or will ultimately offer to combat the new competition. Either way, patients win.”

A CVS-Aetna partnership could spark improved care coordination by expanding offerings in CVS's Minute Clinics, reducing the cost and time of emergency room visits for patients who might not be able to see a doctor right away for services.

Following the news of the AMA statement, all eyes are now on the Justice Department to see whether they step in or watch the merger unfold.

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References

  1. American Medical Association. AMA Urges DOJ to Challenge CVS-Aetna Merger [news release]. Washington, DC: American Medical Association. https://www.ama-assn.org/ama-urges-doj-challenge-cvs-aetna-merger. Published August 8, 2018. Accessed September 19, 2018.
  2. Dafny LS. Does CVS-Aetna spell the end of business as usual? N Engl J Med. 2018;378:593-595.
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