In a prior post, we noted how the surge of mergers was at a record pace, and that more than $1 trillion in deals had been announced in the first six months of 2015. In keeping with that theme, it was recently announced that medical insurer Anthem has agreed to acquire Cigna. The purchase will be $54 billion and will leave the industry with only three large medical insurers.
The deal comes on the heels of several other major industry acquisitions. Aetna struck a deal to purchase Humana for $37 billion. The only other major health insurer would be UnitedHealth, which bought pharmacy benefits manager and prescription provider Catamaran for $12.8 billion. Additionally, CVS Health bought Omnicare in May for $12.7 billion, and Rite Aid purchased EnvisionRx for $2 billion.
These who oppose these deals worry that fewer companies mean that consumers will have fewer choices, which could lead to patients having difficulty exerting their power to create change. Some believe that the rash of mergers is spurred by the Supreme Court’s decision about the Affordable Healthcare Act. Since the law does not appear that it will be repealed, medical insurance providers ostensibly believe that there will be many more people who will need medical insurance and services.
Before the Anthem/Cigna acquisition can be finalized, federal regulators will have to analyze the transaction to ensure it meets a host of federal laws. The story exemplifies the need for experienced legal counsel who can conduct the proper analysis and prepare the necessary reports and disclosures.