The US state of New York is mulling to block parts of the $68bn merger of drugstore store chain CVS Health and Aetna over concerns that the deal might make insurance products costlier for millions of New York residents.
During a recent public hearing convened to hear the public views over merger, New York State Department of Financial Services superintendent Maria Vullo said she is concerned that CVS Health could raise insurance premiums following merger.
Vullo was quoted by New York Post as saying that: “I can stop the deal if it is reasonably necessary to protect New Yorkers.
“In our view, there must be a clear enforceable commitment not to transfer the cost of paying back loans to policyholders.”
Vullo also sought CVS Health to support a proposed state law, under which PBMs will have to register with New York’s finance department, which will empower the DFS to cut drug prices and limit abusive practices.
On 10 October, CVS and Aetna secured permission from the US Justice Department for the merger on the condition that Aetna will offload its Medicare Part D business. However, the deal still requires approval of the state regulatory bodies.
Along with the Pharmacists Society of the State of New York and the Medical Society of the State of New York, many groups have requested the sate to reject the deal. They argued that the merger will limit competition and increase the cost of prescription drugs.
CVS and Aetna first announced the cash-stock merger deal in December 2017.
The merger will combine CVS’ drugstores and pharmacy benefits manager platform with Aetna’s insurance business. The deal secured shareholders’ nod in March this year.
Once the merger is concluded, CVS Health shareholders will own a stake of approximately 78% in the combined group. In addition, Aetna shareholders will own the remainder.