Justice Department Clears Cigna's Acquisition of Express Scripts

Office workstation top view of business people working around M&A keyboard calculator phablet and money on wooden table- merger and acquisition concept

On September 5, The Wall Street Journal reported the DOJ was close to approving the Cigna-Express Scripts deal as well as CVS Health's $US69 billion merger with the insurer Aetna, though that deal might require the divestiture of certain businesses related to Medicare drug coverage before it can go through.

The companies say completion of the transaction is still subject to certain state regulatory approvals and filings required in connection with the transaction, including clearances from certain departments of insurance, and the satisfaction of all closing conditions.

The Justice Department's six-month review found that the merger is "unlikely to result in harm to competition or consumers" due to Cigna's small nationwide PBM business and the preponderance of other PBMs in the market.

"If Cigna is allowed to become the latest in the trend to take PBM needs in-house, it is more likely that consumers could end up at the mercy of a handful of giants - each with its own siloed services - and the choices they now enjoy for medical care and pharmacy needs becoming a thing of the past", Consumers Union senior policy counsel told USA lawmakers earlier this year. Express Scripts shares surged 4% in Monday afternoon trade, and Cigna shares rose almost 2%, compared with a 0.5% slump in the S&P 500 and a 0.3% decline in the Dow Jones Industrial Average.

Insurers, pharmacy-benefits managers and others in the health care supply chain have been making deals to streamline expenses and gain scale in an industry threatened by rising costs for medical services and new competition from the technology sector.

The deal is expected to close by the end of the year. CVS also manages drug-benefits plans for employers and insurers, a business that could help steer Aetna's customers into CVS drugstores when they fill prescriptions.

Cigna is a health insurance provider. The agency also said competition from other vertically-integrated companies and PBMs and the prospect of losing customers makes it unlikely that Cigna and Express Scripts would hike prices for their rivals after merging.

Yesterday's approval "bodes well for the pending US antitrust review of CVS Health Corp's proposed $69 billion acquisition of health insurer Aetna Inc.", writes Reuter's Caroline Humer. Cigna and Express Scripts said the deal will close by year-end 2018.

The Justice Department's approval of the Cigna-Express Scripts deal did not come as a shock.

In the news announcement Monday, Express Scripts CEO Tim Wentworth reiterated that combination of the companies would "be able to do even more to reduce healthcare costs, expand choice, and improve patient outcomes" and "transform healthcare".

On its first quarter earnings call with investors earlier this year, Cigna executives said they expect the deal to result in earnings per share increasing from $18 to $20-21 by 2021 and a long-term annual growth rate of 6% to 8%.

Related News:

Most liked

Here’s Rob Gronkowski’s Simple Advice For New Patriot Josh Gordon
He's a former All-Pro wide receiver who was once among the best at his position. For the Patriots, taking the chance on Gordon makes a lot of sense for them.

Coca-Cannabis? Coke analyzing cannabis in wellness drinks
Coke says it's following the debate over the ingredient cannabidiol or CBD oil. It says it hasn't made any decisions about using it in coke products.

Spooked camel at Pittsburgh circus injures seven
Several witnesses told local news outlets that the camel suddenly grew frightened because a child threw a shovel at its feet. No animals, including the camel, were injured during the incident and all were checked out and cleared by a veterinarian.

Trump laments Sessions recusal: "I don't have an attorney general"
Asked whether he'll fire Sessions, Trump replied, "We'll see what happens". "A lot of people have asked me to do that". Sessions fired back, saying in a statement: " I took control of the Department of Justice the day I was sworn in ".

Russia: Missile that shot down flight MH17 was Ukrainian
On the day that MH17 crashed, a rebel commander posted that his troops had shot down a Ukrainian military plane. It cited factors such as the way light fell on the moving vehicle and claimed it is shown driving in reverse.

Ferrari unveils open-cockpit model as it outlines new plans
These cars were highly successful racing machines and helped to deliver numerous victories in the World Sports Car Championship. The Monzas have already been assigned to some of Ferrari's most loyal clients, who had a preview of the vehicle last night.

Florence aftermath is a ‘nightmare’ of swollen rivers, flooding and rising deaths
Department of Agriculture issued the mortality totals as major flooding continues in the state due to the storm's drenching rains. The town has largely been cut off by flooding from the still-rising Lumber River, which was expected to crest on Wednesday.

Two detainees in sheriff's van drown in South Carolina floodwaters
In a statement, the sheriff's office said the two deputies escaped from the cab and tried to get the women out of the back. State police spokesman Thom Berry told the AP on Wednesday that agents were on the scene aiding in the recovery effort.

Brett Kavanaugh Assault Accuser Christine Blasey Ford Requests Judiciary Hearing Delay
In the Senate, the issue of when and if Ford might testify has ignited a furor, especially among Democratic women. On Tuesday night, Senator Grassley said there's no reason for any further delay of the hearing, even if Dr.

Mikel predicts club to win 2018/19 UEFA Champions League trophy
Striker Sergio Aguero and defender Benjamin Mendy will both be assessed on Tuesday evening ahead of the game . Manchester City coach Mikel Arteta reckons his clubs multi-talented squad is the best in World Football.

Trump to declassify documents on Russian Federation investigation
Adam Schiff of California, the top Democrat on the House Permanent Select Committee on Intelligence, said in a statement Monday. There is no set timeline or format for the release of the materials at this time.

Swollen rivers near record levels as Florence looms
The whir of generators could be heard throughout the city, a sound not expected to dim soon as crews work to restore power. The storm has begun to move into Virginia and West Virginia, and is expected to turn toward New England on Tuesday.

Liverpool's Defence & Other Talking Points Ahead Of Liverpool v PSG
It is very important for us to keep going on our good run. "We changed the system because we expected a change from them". Firmino celebrated by running towards the crowd with one hand covered over his wounded eye, much to Klopp's amusement.

'Fortnite' gamer allegedly threatened to kill kid who beat him
Police say that they increased security at the school Tuesday as a precaution. 'That was done out of an abundance of caution'. According to his attorney, Andrew Karpf, Aliperti is now going through a hard divorce, and is thus under a lot of stress.

Czech PM says he stands behind Hungary after European Union parliament vote
He also claimed the parliament's decision was "fraudulent" as abstentions were not counted in the final 448-197 vote. This could eventually lead to sanctions, such as the suspension of the voting rights in the Council.