Cigna's $67 billion bid for Express Scripts is the latest in a spree of proposed mega-tie-ups in the health service industry, all of which face several antitrust challenges, Bloomberg reports.
Here are five things to know about the antitrust barriers faced by Cigna and CVS Health, which agreed to buy Aetna for $69 billion in December 2017.
1. Both potential bids argue by combining, they will be able to lower healthcare costs by creating greater efficiencies. Antitrust regulators will determine whether they believe customers will benefit from the transactions.
2. Cigna and CVS Health's challenge to convince antitrust regulators any savings from increased efficiencies will be passed onto consumers comes as the Justice Department is changing how it approaches vertical transactions. Vertical transactions involve combinations that bring together companies from different points amid an industry supply chain, Bloomberg reports.
3. Vertical deals don't pose the same risks as transactions combining direct competitors. However, the deals could still negatively affect how Cigna and CVS compete with their rivals, the report states.
4. Some lawyers predict the Cigna-Express agreement will likely be reviewed by the Justice Department's antitrust regulators and the not the Federal Trade Commission. The Justice Department, which blocked proposed mega-mergers between Anthem and Cigna and Aetna and Humana in early 2017, is investigating the CVS Health-Aetna transaction.
5. Jennifer Rie, a Bloomberg Intelligence analyst, predicts antitrust regulators will approve Cigna's bid for Express Scripts. Ms. Rie said it is less likely Cigna will gain enough market share to be anticompetitive with rival companies, due to other large insurers in the market.
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