CVS-Aetna Merger: AHF Urges Court to Stop the 800-pound Gorilla

In Featured, News by Ged Kenslea

WASHINGTON DC (July 21, 2019).  Friday, Judge Richard J. Leon of the U.S. District Court for the District of Columbia heard closing arguments from attorneys for the parties and also from several friends of the court (amicus curiae) opposed to the nearly $70 billion acquisition of Aetna by CVS Health.  While he did not issue a decision, Judge Leon stated his intent to issue that decision in the not-so-distant future, noting that the merger potentially has “grave consequences to millions of people.”

Last month, amici witnesses from AIDS Healthcare Foundation (AHF), the American Medical Association (AMA), Consumer Action and U.S. PIRG testified about the negative impact the merger would have on pharmacies, health plans and patients. During closing argument Friday, AHF emphasized that the judge should not rubber stamp the merger, which the U.S. Department of Justice has already blessed subject to Aetna’s divestiture of its Medicare Part D plan.  Rather, AHF urged, the judge has a duty to evaluate whether the proposed settlement makes a “mockery of judicial power” because the Department of Justice failed to consider numerous concerns and harms to the public interest that will, or potentially will flow from the merger.

Among the harms feared by AHF are those described by its Chief Medical Officer, Dr. Michael Wohlfeiler, JD, MD, AAHIVMS, described at last month’s evidentiary hearing.  Friday, he added, “As an HIV doctor for over three decades, I know that personal, high touch interactions keep chronically ill patients engaged in their care and adherent to their medications – the key to staying healthy.  AHF’s pharmacies provide those high-touch services, including education, counseling, follow-up calls and medication management.  Because our HIV specialist pharmacists regularly see or call their patients about their prescriptions, our pharmacists are often the first person in the patient’s care team to know when the patient is either at risk or has actually fallen out of care. The PBM’s alternative – a faceless, specialty mail order service lacking that critical human touch – can’t compete. The way we see it, the merger is CVS’s way of avoiding competition, by simply pushing independent pharmacies off the playing field.”

“The playing field is already stacked against community and specialty pharmacies like AHF’s,” says Laura Boudreau, AHF’s Chief or Operations/Risk Management and Quality Improvement. “PBMs want more and more of this business – especially the specialty pharmacy business — for themselves because specialty medications are expensive and therefore lucrative.  PBMs are willing and able to use unfair and anticompetitive tactics like oppressive reimbursement (DIR) fees and forced mail order to take that business away from independent pharmacies.  When the health plan, PBM, and pharmacies all merge – as they do here – they create an 800-pound gorilla that can and does keep vulnerable patients from accessing their pharmacy of choice and forces them to accept worse services at higher costs.”

At the end of its oral argument, AHF proposed a third path for the court – beyond mere approval or rejection of the proposed settlement.  AHF proposed that the court consider conduct remedies; that is, remedies that would address the vertical integration concerns raised by AHF.  These remedies include adding to any settlement:


  • A provision requiring that all rival pharmacies have non-discriminatory access to CVS Caremark’s pharmacy networks at fair reimbursements that cover actual drug costs and dispensing costs.
  • A provision that managed care plans should not be denied access to CVS Pharmacy networks, and that managed care plans’ access should be at a fair price.
  • A provision that all Aetna plan members must be allowed to opt out of any CVS/Caremark specialty or other mail order programs.


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