On September 5, The Wall Street Journal reported the DOJ was close to approving the Cigna-Express Scripts deal as well as CVS Health's $US69 billion merger with the insurer Aetna, though that deal might require the divestiture of certain businesses related to Medicare drug coverage before it can go through.
The companies said, to date, that they had obtained clearances from departments of insurance in 16 states, and are working with regulators in the remaining jurisdictions to obtain clearances for the merger. The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna's PBM business nationwide is small, the DOJ stated.
But many observers, including hospital groups, employers and other health plans, have criticized the deal and that of CVS Health and insurer Aetna's, which has not yet been cleared by the Justice Department, as profit-driven schemes unlikely to benefit consumers.
The new company will marry Cigna's business of managing health plans for corporations and the government with Express Scripts' role handling pharmacy benefits for those same customers.
The move terminates the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, one of the conditions necessary to close the deal, officials said in an announcement on Monday.
Cigna overcame a last-minute effort by activist investor Carl Icahn to nix the deal, warning fellow shareholders in an early-August open letter that the deal was among the "worst acquisitions in corporate history". The US Department of Justice has approved Cigna's $54 billion purchase of the pharmacy benefits management company. Approval by the Justice Department smooths the way for the deal to wrap up by the end of the year, the companies said Monday in a joint statement.
Cigna's stock was trading upward at $199 by mid-morning Tuesday, and Express Scripts' was trading at $95.59.
The Justice Department's approval of the Cigna-Express Scripts deal did not come as a shock. "The value that we deliver together will help put our society on a far more sustainable path - one that helps health care professionals close gaps in care and supports our customers along their health journey".
Aetna and Cigna, however, were determined to seek growth through deals while responding to a changing healthcare landscape, eventually targeting mergers with the nation's largest pharmacy benefit managers (PBMs). A federal judge blocked that deal in February 2017. Cigna was up 1.4 percent to $197.84.
After its relationship with Anthem soured, Cigna wasted no time looking for another partner.
Express Scripts is one of three massive pharmacy benefit managers.
The Department of Justice just cleared Cigna's $US67 billion merger with Express Scripts. The agency had asked for more information from the companies back in April.
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