Aetna Divests Medicare Drug Business to Complete CVS Merger
Thursday September 27, Aetna announced plans sell its Medicare prescription drug plan business to WellCare Heath Plans, Inc. on December 31, 2018. WellCare Heath Plans, Inc. is a small health insurer based in Tampa, Florida. This divestiture is made up of approximately 2.2 million members, Aetna's entire standalone Medicare Part D patient base, but no price has been announced. Closing of this deal is contingent upon the closing of CVS Health Corporation’s proposed acquisition of Aetna, regulatory approvals and other customary closing conditions.
The divestiture of these clients by Aetna is an important concession to regulators to avoid post-CVS-Aetna merger competitive concerns due to too much market power in that specific market. CVS's $69 billion purchase of Aetna claims to use vertical integration to reduce healthcare costs to consumers. The DOJ found that the vertical merger would not be harmful so long as a few divestments were made such as the divestment of Medicare prescription drug plan business.