The Department of Justice gave preliminary approval on Wednesday for CVS Health Corp.’s (NYSE: CVS) acquisition of insurer Aetna (NYSE: AET), cementing a deal that could transform how U.S. consumers access health care.
The two companies cleared their path to merge when Aetna announced on Sept. 27th that it reached an agreement to sell its Medicare Part D drug plan business to WellCare Health Plans for an undisclosed amount. Regulators were concerned about the overlap between CVS’ and Aetna’s Medicare Part D plans. The Justice Department said that the divestiture was a condition to winning final approval.
“The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain,” Assistant Attorney General Makan Delrahim said in a statement.
CVS, the nation’s largest drugstore chain, announced in December that it would buy Aetna for about USD 69 Billion in cash and stock. The deal combines CVS’ pharmacies with Aetna’s insurance business, blurring traditionally distinct lines in hopes of lowering costs.
CVS Chief Executive Officer Larry Merlo outlined his vision for the combined Company in a Sept. 20th speech — a new data-driven health-care model that’s more personal, convenient and tailored to individual patients than ever before.
In combining CVS and Aetna, Merlo said the two companies will create a model that’s “easier to use, less expensive and puts people at the center of their care.”
The companies are also planning to add more services to the MinuteClinics so they can help people manage chronic conditions like diabetes in addition to treating acute illnesses like coughs and colds.
Merlo said in September that the combined Company will have more data, giving CVS a more complete picture of someone’s health. That will allow the Company to better predict who might develop diabetes and provide customers with preventive counseling — with the goal of reducing the overall cost of care.