The train is moving so slowly on the tracks that even Pauline is getting some shut-eye. The minimal coverage given to last Wednesday’s hearings in the Court of Judge Richard Leon on the CVS-Aetna merger is understandable, as the hearing trod the well-worn path without a hint of when this will all Wind Up:
- The Department of Justice argued that the concerns over the merger were settled via divestiture of its pharmacy benefit management (PBM) operation
- The amici curiae witnesses (AIDS Healthcare Foundation (AHF), the American Medical Association (AMA), Consumer Action and U.S. PIRG) countered that it’s nowhere near enough, that the PBM competition represented by a new company would not be enough and higher drug prices would result.
- Anything said by the DOJ attorneys or the ability to call more witness after the earlier hearing was derided by Judge Leon as “phantasmagorical,” “violating the first rule of holes”, and typified by the generally favorable to the judge Columbus Dispatch as “scolding”.
This Editor found no mention of the five states–California, Florida, Hawaii, Mississippi, and Washington–which were supposed to participate in the hearing to support the DOJ position [TTA 17 June]. One has to presume that they were not very vocal or permitted to be so.
Instead much was made of the judge’s interest in the AIDS Healthcare Foundation (AHF) remedies targeting relief for specialty and community pharmacies:
- All rival pharmacies should have non-discriminatory access to CVS Caremark’s pharmacy networks at fair reimbursements that cover actual drug costs and dispensing costs.
- Managed care plans should not be denied access to CVS Pharmacy networks, and that managed care plans’ access should be at a fair price.
- All Aetna plan members must be allowed to opt out of any CVS/Caremark specialty or other mail order programs.
So the hearings wind down, with increased speculation that Judge Leon will simply disallow the merger sometime in the future, which will set up another round of court actions by the merged organizations on the merits and whether the Tunney Act can even be used in this way. And meanwhile, online pharmacies like PillPack scoop up the cream off CVS Caremark’s business. Healthcare Dive, Yahoo News.
The next chapter of the ‘Perils of Pauline’ saga that is the CVS-Aetna merger won’t commence until June, as it turns out, but already the amici curiae are piling up on both sides. Judge Richard Leon of the US District Court for the District of Columbia has been lining up the witnesses he’ll be hearing from, both for and against.
On the ‘anti’ side, testifying that the settlement agreement would be anti-competitive and not in the best interest of consumers, the American Medical Association (AMA) had called in three professors, the AIDS Healthcare Foundation three, and Consumer Action and the US Public Interest Research Group (PIRG) one. On the ‘pro’ side, put forward by CVS and for the Department of Justice, are five witnesses, healthcare executives and government consultants, who will testify that actions taken by CVS and DOJ will preserve competition and benefit consumers.
Certainly as we clock the ninth month after DOJ approved the merger and the companies have closed the deal, the drama continues, as Judge Leon continues to get coverage and the merger continues to be held up in this highly unusual proceeding. HealthLeaders 22 April and 7 May.
Update 13 May. The DOJ is challenging the three AMA witnesses, saying that they will be broadening the hearing beyond the settlement agreement which is what the review by Judge Leon is supposed to be about. On the other hand, the judge has already stated that the settlement covers “about one-tenth of 1%” of the merger, so he is already staking out a much larger territory. The AMA, of course, is quite pleased with the opportunity. Is this hearing pushing the envelope of judicial overreach in this judge’s interpretation of what a District Court can do under the Tunney Act? We can only wait and see. Healthcare Dive 13 May. Our coverage of the hearing to date here.
Update 14 May. DOJ of course lost its fight with Judge Leon to limit the scope of the hearing and the AMA witness testimony, with the judge stating it is “essential” to understand how PBM affects Medicare Part D drug plans, though Aetna divested itself of the latter at DOJ’s direction. Both sides have three approved witnesses each for the three-day hearing. The ‘antis’ are Neeraj Sood (AMA), Diana Moss (Consumer Action/PIRG) and Michael Wohlfeiler (AIDS Healthcare foundation). The ‘pros’ are Alan Lotvin (CVS Health), Terri Swanson (Aetna) and Lawrence Wu (NERA Consulting). Healthcare Dive 14 May