The Justice Department’s approval of the $69 billion merger between CVS Health and Aetna on Wednesday caps a wave of consolidation among giant health care players that could leave U.S. consumers with less control over their medical care and prescription drugs.
The approval marks the close of an era, during which powerful pharmacy benefit managers brokered drug prices among pharmaceutical companies, insurers and employers.
But a combined CVS-Aetna may be even more formidable. As the last major free-standing pharmacy manager, CVS Health had revenue of about $185 billion last year, and it provided prescription plans to roughly 94 million customers. Aetna, one of the nation’s largest insurers with about $60 billion in revenue last year, covers 22 million people in its health plans.
The two companies said that they will be better able to coordinate care for consumers as the mergers help tighten cost controls. Larry J. Merlo, chief executive of CVS Health, said in a statement that the approval “is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer health care experience.”
But critics worry that consumers could end up with far fewer options and higher expenses.
Just last month, the Justice Department also approved the takeover of Express Scripts, a major CVS rival, by the big insurer Cigna.
“This type of consolidation in a market already dominated by a few, powerful players presents the very real possibility of reduced competition that harms consumer choice and quality,” George Slover, senior policy counsel for Consumers Union, an advocacy group, said in a statement.
The consumer organization had opposed the Aetna-CVS merger, arguing that people enrolled in Aetna health plans could be forced to seek care at CVS retail clinics, and that those who were not insured by Aetna could pay higher prices for drugs than those who were.
“The combination of CVS and Aetna creates an enormous market force that we haven’t seen before,” Slover said.
The Justice Department had undertaken an antitrust review of these types of deals, approving many because they involve distinct businesses. It granted conditional approval to the CVS-Aetna deal as long as Aetna sold off its private Medicare drug plans.
Amid the growing outcry over the high price of medicines, pharmacy managers have been vilified alongside big drugmakers.
Critics said pharmacy managers’ secretive deals — under which price-setting strategies are not publicly disclosed — enrich companies on all sides of the prescription drug pipeline while failing to benefit consumers.