CVS has said thatselling off some Medicare prescription-drug plans wouldn't have amaterial impact on the expected benefits of the Aetnadeal.
Aetna Inc. said it plans to sell its Medicare prescription-drugbusiness to WellCare Health Plans Inc., a key step towardcompleting its $67.5 billion merger with CVS Health Corp.
|Financial terms of the deal weren't disclosed. In a securitiesfiling, Aetna said that the “purchase price is not material” to thecompany. The divestiture of the Medicare Part D plans to WellCare may helpresolve objections to the CVS-Aetna deal from U.S. antitrust regulators.
|“Aetna believes the divestiture is a significant step towardcompleting the DOJ's review” of the CVS deal, the company said inthe filing.
|Related: CVS-Aetna deal could revolutionize how drugs arepaid for
|CVS has said that selling off some Medicare prescription-drugplans wouldn't have a material impact on the expected benefits ofthe Aetna deal, because they're a small portion of the combinedfirm's overall business. CVS is a drugstore giant, and manages drugbenefits for employers and insurers, while Aetna is the No. 3 U.S.health insurer, with about 22 million members.
|WellCare, a smaller health insurer that's based in Tampa,Florida, has been using deals to fuel its expansion. The companycompleted a $2.5 billion deal for the health insurer Meridian inearly September, adding about 1.1 million insurance customers toits base of 4.4 million members. As a sign of its growth, WellCarewas added to the S&P 500 Index this month.
|Medicare Part D plans offer prescription-drug insurance for theelderly and disabled, subsidized by the federal government. As ofJune, CVS had the biggest Part D business, with about 6.1 millioncustomers, while UnitedHealth Group Inc. was No. 2 at 5.4 millionmembers, according to data compiled by Bloomberg. Aetna wassmaller, with about 2.2 million members.
|Read more about the major moves in the health carespace:
- Cigna-Express Scripts deal cleared byDOJ
- How broker consolidation and industry alliances arechanging the industry
- What the CVS/Aetna merger means for healthcare
Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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