Aetna is set to sell its drug plan business to WellCare Health Plans
US health insurance giant Aetna has announced its plans to sell its Medicare Part D drug plan business to WellCare Health Plans for an undisclosed sum.
The deal forms part Aetna’s wider strategic plans to secure approval for its $69bn merger with CVS Health, which was officially announced late last year. It also follows on from Cigna’s $52bn acquisition of Pharmacy Benefit Manager (PBM) Express Scripts, which has recently been approved by federal officials, providing advantages to consumers in both insurance and PBM markets.
"We are concerned with the considerable amount of debt — over $40bn — that CVS is taking on to finance this transaction," Maria Vullo, superintendent of New York State's Department of Financial Services stated.
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"The considerable pressure to repay debt would cause the resulting company to repay its substantial obligation before investing in pro-market and pro-consumer measures."
This new acquisition will become WellCare’s third acquisition in two years. The move will eliminate any potential obstacles against the deal, particularly from the Department of Justice. If successful, the deal will close in the fourth quarter.
A key player in the Medicaid insurance business, the company presently serves close to three million US citizens, but will aim to scale up its activities following the merger.