AAI President Dr. Diana Moss testified in federal district court in a rare hearing under the Antitrust Procedures and Penalties Act (Tunney Act). AAI, consumer groups, and other parties have vigorously opposed the merger that combines behemoth retail pharmacy and pharmacy benefit (PBM) manager, CVS, with one of the largest health insurers, Aetna.
Judge Richard Leon is presiding over United States v. CVS Health Corp., and Aetna, Inc. (Case No. 1:18-cv-02340-RJL) in the U.S. District Court for the District of Columbia. He took the unusual but critical step of holding a hearing to help determine whether the government’s proposed consent decree, which requires the single divestiture of Aetna’s prescription drug plan (PDP) assets, is in the public interest. Moss was selected as a witness from a larger group of experts put forward by amici in the Tunney Act proceeding. She testified on behalf of U.S. PIRG and Consumer Action.
AAI and other groups have expressed concern that the proposed divestiture of Aetna’s PDP assets will be ineffective in ameliorating the competitive harm alleged in the government’s complaint — putting competition and consumers at risk. The U.S. Department of Justice has already allowed the companies to sell Aetna’s PDP assets to WellCare Health, a much smaller rival with limited ability and track record to fully restore competition lost by the merger.
AAI expressed concern as early as March 2018 that the merger will enhance incentives for the merged company to constrain competition in insurer markets and retail pharmacy and PBM markets by raising rivals’ costs or cutting them off from important inputs or customers. The government’s complaint does not address those important issues. In her testimony, Moss provided analysis and perspective that could aid the court in rendering a decision on whether the proposed settlement is in the public interest.
