January 10, 2019

Feds: Partial gov. shutdown could slow decision on CVS-Aetna deal

Flickr Creative Commons | Chez Julius Livre 1
Flickr Creative Commons | Chez Julius Livre 1
Aetna headquarters in Hartford.

The ongoing partial government shutdown could delay a federal judge's approval of CVS Health's proposed $69 billion acquisition of Hartford health insurer Aetna, according to court filings.

The Justice Department in a court filing Tuesday said the shutdown, entering day 20 on Thursday, could delay its comments on the CVS-Aetna combination, which are needed before U.S. District Judge Richard Leon gives final approval on the deal DOJ struck with the companies in October to resolve antitrust concerns.

CVS' acquisition of Aetna closed Nov. 28, but Leon is still reviewing DOJ's agreement that allows the combination contingent on Aetna selling off its Medicare Part D prescription drug plans to a subsidiary of WellCare Health Plans Inc.

Companies rarely wait for federal court approval before closing their deals and by law, are not barred from integrating prior to the settlement review.

Leon had aired competitive concerns and criticized the companies for moving forward without properly consulting him.

Weeks later, the federal judge softened his tone with the companies and asked them to keep certain assets separate after CVS and Aetna offered several pledges to ease his antitrust concerns.

In Tuesday's court filing, DOJ said a funding shortage on Jan. 4 means the Antitrust Division will not be able to process their comments on the deal until the money is restored. The court could, however, make an exception and order the comments, the filing says.

CVS and Aetna on Thursday declined comment on Tuesday's court filing.

The partial shutdown has impacted government agencies since Dec. 22 after President Donald J. Trump's demand for billions of dollars to build a wall along the U.S. border with Mexico.

Congressional Democrats are pushing back against Trump's proposal they say is too costly and ineffective in curbing illegal migration over the southern border.

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