Cigna Disputes DOJ’s Claim That Anthem Deal Will Harm Competition, Innovation
Source: Fierce Health Care
Two months after the Justice Department filed suit against Anthem’s purchase of Cigna, the insurer has finally responded to the DOJ’s complaint.
Cigna agreed with Anthem that the deal between the two would enhance access to affordable plans for consumers and wouldn’t harm competition, according to a new court filing.
Cigna and Anthem are scheduled to go court to defend their merger in November. Anthem had said that it needed the case to finish in 2016 in order to meet an April “drop-dead” date detailed in its contract with Cigna.
The DOJ had said in its complaint that Cigna “increasingly competes head to head with Anthem by finding innovative ways to lower its customers’ medical costs”–an effort that has “pressured Anthem to respond.” Cigna agreed in the filing “that it at times competes with Anthem and “that it is regarded by several sources as innovative,” but that it “lacks sufficient information to form a belief” on any pressure for Anthem to respond. The insurer also says that it “has adopted strategies for winning business from Anthem, just as it has for other competitors.”
Cigna also admitted that it discussed the possibility of buying Humana last year, before Aetna sealed an agreement to acquire the Lousville, Kentucky-based insurer. Cigna’s lawyers also say that the company entertained discussions with UnitedHealth about a possible consolidation.
While Anthem has continued to support the deal since getting hit with the DOJ’s lawsuit, Cigna has not shared the same level of optimism. Following the announcement of the suit, Cigna said it didn’t believe the transaction could close by the end of 2016, “if at all.”
Still, Cigna is abiding by the obligations of its merger contract with Anthem, CEO David Cordani has said, but he noted the insurer would engage in an “ongoing evaluation” of other options to deliver shareholder value. If the deal falls through, Cigna will have $5 billion in cash reserves to pursue a smaller scale acquisition or repurchase some of its stock, Cordani told investors last month.
Ana Gupte, close follower of the merger case and analyst at Leerink Partners, previously said the market estimates the likelihood of the Anthem-Cigna case getting past the DOJ’s challenge at 25 percent, FierceHealthPayer reported.
Filed Under: ACA/Health Reform