A federal judge has permitted Aetna Inc. to independently make decisions on products, pricing and personnel during his review of its $69 billion sale to CVS Health Corp.
U.S. District Judge Richard Leon in Washington, reviewing the agreement between the Justice Department and CVS Health allowing the Woonsocket, R.I. pharmacy giant to buy the Hartford health insurer, has indicated he will not interrupt most of the companies' integration.
He said in an order Friday he is satisfied the "assets in the challenged acquisition will remain sufficiently separate."
Leon listened to arguments in a hearing last week after saying the companies and Justice Department treated him like a "rubber stamp" and that he was "being kept in the dark" about the closing of the merger.
CVS countered by saying government examinations of its Aetna deal were "more than robust." Leon said in his order that CVS made "constructive and appropriate representations."
CVS completed its acquisition of Aetna Nov. 28, but did not win court approval for a settlement with the Justice Department intended to promote competition. 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 harm competition.
A federal law known as the Tunney Act requires court approval of settlements the Justice Department reaches with merging companies to resolve competition problems. It doesn't prohibit companies from closing and merging operations as the settlement is considered.
Leon said in his order that until a final judgment is entered, CVS shall operate Aetna's health insurance business as a "separate and distinct unit" from CVS retail pharmacy and pharmacy benefit manager CVS Caremark.
Doctors' and pharmacists' groups have criticized the CVS-Aetna deal, saying it limits choices for patients and consumers.
The court approval process of merger settlements between the Justice Department and companies can take months, and companies routinely close their deals before a judge signs off. Leon has faced off before with the Justice Department's antitrust division. The judge oversaw the division's unsuccessful challenge to AT&T Inc.'s takeover of Time Warner.
