Aug 23, 2018
California Insurance Commissioner Dave Jones is urging the Department of Justice (DOJ) to sue to block the proposed merger of CVS and Aetna. Jones said it would have significant anti-competitive effects on consumers, health insurance markets, the Medicare Part D market, and the highly-concentrated market for pharmacy benefit managers. On June 19, Jones held a public hearing at which executives of CVS and Aetna testified about the proposed merger. Jones said his stand against the merger takes into account expert testimony from a panel of academics in the area of health care competition as well as consumer and medical provider representatives, and members of the public.
Jones warns, "A merger of this size and type…will likely lead to increased prices and decreased quality. Further, partial divestiture or other remedies traditionally used by the Department of Justice will not adequately protect consumers…Traditional methods to avoid market concentration will not address potential impacts on service quality, the power to charge excessive rates, or the creation of barriers to block a potential market participant with the resources to enter into new markets.” His recommendations are contained in a 15-page letter submitted to DOJ.
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