Tech: The DOJ is reportedly close to approving 2 healthcare megamergers (CVS, AET, CI, ESRX)

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CVS Health President and CEO Larry J. Merlo

The Department of Justice is getting close to approving two healthcare megamergers, The Wall Street Journal reported Wendesday. Express Scripts was up as much as 4% on the report while Cigna, Aetna, and CVS all gained at least 1%.

  • The Department of Justice is getting close to approving two healthcare megamergers, The Wall Street Journal reported Wendesday.
  • The mergers —one between pharmacy CVS Health and insurer Aetna, and the other between insurer Cigna and pharmacy benefit manager Express Scripts — were announced at the end of 2017 and in March, respectively.
  • Express Scripts was up as much as 4% on the report.
  • Cigna, Aetna, and CVS were all up at least 1%.

Two massive healthcare mergers are about to get the green light from the Justice Department.

The Wall Street Journal reported Wednesday that the DOJ was nearing an approval of both pharmacy CVS Health's $69 billion merger with insurer Aetna, and insurer Cigna's $67 billion deal with pharamcy benefit manager Express Scripts.

The mergers would redraw the lines around what defines healthcare companies. For example, a combined CVS and Aetna would create a new company containing numerous healthcare businesses, including a health insurer, a retail pharmacy, and a pharmacy benefits manager, which negotiates prescription-drug prices with drugmakers. Meanwhile, Cigna's deal with Express Scripts would end the days of the standalone PBM by combining it with an insurance business.

The deals had received additional scrutiny from the DOJ, which requested more information from both sets of companies.

The Journal reports CVS and Aetna may be required to sell certain businesses related to Medicare drug coverage in order for their merger to go through, while a Cigna-Express Scripts deal could come with no such requirements.

In August, Cigna and Express Scripts shareholders voted for the deal to go through. The deal had briefly been in jeopardy after billionaire Carl Icahn came out against the deal, saying it "may well rival the worst acquisitions in corporate history." He ultimately reversed his course.

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