A federal judge has set a hearing for up to three days next month to review CVS Health Corp.'s $69 billion purchase of Aetna, with the divestiture of Aetna's Medicare prescription drug plans playing a key role.
U.S. District Judge Richard J. Leon on Monday decided that six witnesses, including an antitrust expert and Alan Lotvin, executive vice president and chief transformation officer at CVS Health, may testify. CVS closed on the deal last November.
Essential to his evaluation, he said, is an understanding of how participants in markets for individual prescription drug plans are affected by markets for pharmacy benefit management services, he said. Pharmacy benefit management, or PBM, services are typically used by employers to help keep down prescription costs.
The Justice Department cleared the deal in October after requiring the sale of Aetna's Medicare prescription drug plans to WellCare Health Plans Inc. to address the government's concerns that the merger would undermine competition.
If an analysis of PBM markets "was not so intertwined" with evaluating the Justice Department's proposed requirement of the sale of Aetna's Medicare prescription plans, "the court could still hear from these witnesses before deciding whether the government's proposed final judgement makes a mockery of judicial power or affirmatively harms third parties," said Leon, a Washington, D.C., judge.
A CVS spokesman declined to comment.
The hearing is not a trial, the judge said. The Justice Department will not be required to offer evidence and witnesses will not be cross-examined.
Federal law requires court approval of settlements the Justice Department reaches with merging companies to resolve competition problems.
Antitrust experts and others have "persuasively argued" that an assessment of the proposed judgment on the public interest must account for how the divestiture may be affected by PBM markets, Leon said.
Doctors' and pharmacists' groups have criticized the CVS-Aetna deal, saying it limits choices for patients and consumers.
The hearing is set to begin June 4 and extend through June 6 at the latest.
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