CVS and Aetna have been functioning as one merged company for a few months now. But, because of an old antitrust law known as the Tunney Act, the D.C. Circuit Court is reviewing the Justice Department’s terms for the merger. It’s basically a review of a review, happening after the fact, where the court is deciding whether the DOJ did enough to protect competition.Judge Richard Leon is not convinced that it did. So he’s taking the unusual step of having witnesses testify about their concerns with the Justice Department’s decision. Judge’s reviews under the Tunney Act are usually just cursory. It’s unclear what would happen if the judge tried to force changes in the merger’s terms. There’s virtually no precedent for a judge seeking changes like that under the act.
This does not mean the CVS-Aetna merger is going anywhere. CVS, which has its headquarters in Woonsocket, declined to comment.
Amanda Starc, a healthcare economist at the Kellogg School of Management at Northwestern University, says the merger might lead to fewer choices and higher costs for consumers. But it also could give Aetna good reason to make prescription drugs more affordable.
“You might like it if the person who’s paying for your medical bills is also the person paying for your drug bills,” Starc said. “Why would you like that? Well, then they have all the right incentive to keep you healthy, because if they spend a little more making sure you take your prescription drugs so you don’t end up in the hospital, they get to keep that savings.”
But George Stover, a senior policy counsel at Consumer Reports, says the merger is bad news for consumers.
“Competition makes sure that the marketplace works for consumers,” Stover said. “This merger, we’re concerned, is going to have an adverse impact on those choices and how they play out in the marketplace.”