By Blake Dodge
October 18, 2018, 6:11 PM EDT Updated on October 19, 2018, 6:48 AM EDT
New York state officials are considering blocking parts of the $68 billion merger of drugstore store chain CVS Health Corp. and Aetna Inc., jeopardizing billions of dollars in insurance premiums for Aetna.
CVS and Aetna won approval from the U.S. Justice Department on Oct. 10, contingent on Aetna divesting its Medicare Part D business, which covers prescription drugs for seniors. But the deal still needs to pass through state regulatory bodies.
At a public hearing in Manhattan on Thursday, Maria Vullo, superintendent of the state Department of Financial Services, said her agency might block CVS’s merger with Aetna’s New York unit. She called U.S. approval of the overall deal “myopic” and repeatedly asked CVS and Aetna representatives for written evidence that they would deliver on promises to lower prices.
Several groups, including the Pharmacists Society of the State of New York and the Medical Society of the State of New York, urged the state to block the deal. They said the merger would limit competition and drive up the cost of prescription drugs. Assemblyman Richard Gottfried, chairman of the Health Committee, said the deal introduces “dangerous trends” in consumer access.
While CVS has said in the past that the merger would result in lower costs for consumers, Elizabeth Ferguson, deputy general counsel for CVS, told Vullo there wasn’t a specific plan to lower prices.
CVS and Aetna announced the deal in December 2017 but continue to face regulatory hurdles. Connecticut approved the deal Oct. 17, and the New York will reach a decision after Oct. 25.
Shares of CVS and Aetna were little changed in New York Thursday.