DOJ Seeks to Limit Physician Testimony in CVS-Aetna Merger Review

The United States Department of Justice (DOJ) and CVS Health Corporation are seeking to block or limit the testimony of the American Medical Association’s (AMA) proposed witnesses in the CVS-Aetna merger review.

As OTW reported back in August 2018 (Can the AMA Block the Pending CVS-Aetna Merger?), CVS agreed to purchase Aetna in December 2017 for $69 billion. This would be a vertical merger, where companies that are not direct competitors, but in similar industries, want to combine.

California Insurance Commissioner Dave Jones wrote a 15-page letter asking the DOJ to block the CVS-Aetna deal. The California Insurance Commission is the largest consumer protection agency in California.

The California Insurance Commissioner was joined by other interested organizations, including the American Medical Association, whose president Barbara L. McAneny, M.D., wrote her own letter urging the DOJ to block the merger.

The DOJ officially challenged the CVS-Aetna merger on the grounds that the merger would harm competition in the Medicare Part D market in some locations in the United States.

To settle the DOJ’s antitrust concerns, CVS and Aetna sold Aetna’s Medicare Part D business to WellCare Health Plans. The merger was closed in November.

However, under the Tunney Act, courts have the power to review DOJ decisions. Federal District Court Judge Richard Leon ordered a Tunney hearing to review the parties’ consent decree. Judge Leon’s review is limited to determining whether the merger is in the public’s best interest.

Judge Leon has previously voiced skepticism of the deal that CVS and Aetna struck with the DOJ. He has previously said that the settlement only addresses “about one-tenth of 1%” of the issues.

Judge Leon released a list of witnesses that consisted of representatives of groups that had filed amici curiae (“friend of the court”) briefs against the deal, including the American Medical Association and the American Antitrust Institute.

CVS and the DOJ have objected to the American Medical Association’s proposed economics and health experts, Richard Scheffler and Neeraj Sood, and antitrust legal expert, Tim Greaney. The government also objected to other witnesses proposed by the AIDS Healthcare Foundation, Consumer Action, and U.S. PIRG.

Attorneys for CVS and the DOJ have argued that these witnesses should not be allowed to testify because the testimony is likely to be outside of the bounds of the limited scope of the Tunney hearing.