Morning Briefing
Summaries of health policy coverage from major news organizations
Aetna To Sell Medicare Part D Business As Step Forward In Deal With CVS
Aetna is selling its Medicare prescription drug business, potentially clearing the way for CVS Health to complete its $69 billion takeover of the insurer. CVS announced plans to buy Aetna late last year. The deal is expected to give the drugstore chain a bigger role in health care, with the companies combining to manage care through CVS stores, clinics and prescription drugs. (9/27)
The announcement marks a major step forward for CVS’s planned acquisition of Aetna, a nearly $70 billion deal that will unite the third-biggest health insurer with the drugstore and pharmacy-benefit company. The Wall Street Journal previously reported that Justice Department antitrust enforcers were preparing to give the green light to the deal, and that WellCare was in talks to acquire Medicare drug plan assets from the merger partners. (Wilde Mathews and Prang, 9/27)
Medicare Part D plans offer prescription-drug insurance for the elderly and disabled, subsidized by the federal government. As of June, CVS had the biggest Part D business, with about 6.1 million customers, while UnitedHealth Group Inc. was No. 2 at 5.4 million members, according to data compiled by Bloomberg. Aetna was smaller, with about 2.2 million members. (Tracer, 9/27)
"Aetna and CVS Health continue to engage in productive discussions with the DOJ. Aetna’s expectations regarding the timing of the closing of the CVS Health Transaction remain unchanged," the SEC filing reads. (Burke, 9/27)
In other health industry news —
After two failed buyout attempts that could have put it in a better position to compete against larger rivals, Rite Aid is shuffling its board of directors and dividing power at the top of the drugstore chain. Rite Aid said Thursday that three new, independent directors will be nominated to its board and that CEO John Standley will no longer hold the title of chairman. That goes to current board member Bruce Bodaken. (Murphy, 9/27)
UnitedHealth Group Inc. bought pharmacy company Genoa Healthcare from private equity group Advent International. The price was about $2.5 billion, according to a person familiar with the transaction. UnitedHealth, the biggest U.S. health insurer, beat out other parties including drugstore chain Walgreens Boots Alliance, which was said to be interested in Genoa in August, according to the person, who requested anonymity because the talks were private. (Tozzi, Porter and Tracer, 9/27)
