Anthem To Appeal Judge’s Decision To Block Cigna Deal
Feb. 10--Anthem, Inc., said Thursday it will appeal a federal judge's decision blocking its proposed $48 billion purchase of Cigna in Bloomfield.
The Indianapolis-based health insurer said it will seek an expedited hearing to allow it to "move forward" with the deal.
Joseph Swedish, chief executive officer of Anthem, said in a statement that executives are "significantly disappointed" by the decision. The megamerger would have saved consumers more than $2 billion annually in medical costs, he said.
"If not overturned, the consequences of the decision are far-reaching and will hurt American consumers by limiting their access to high-quality affordable care, slowing the industry's shift to value-based care and improved outcomes for patients and restricting innovation, which is critical to meeting the evolving needs of healthcare consumers," he said.
Cigna, which had been cool to Anthem's overture, was noncommittal about its plans. In a statement, the insurer said it will "carefully review the opinion and evaluate its options in accordance with the merger agreement."
U.S. District Judge Amy Berman Jackson in Washington ruled Wednesday that the transaction violates antitrust laws by reducing competition among insurers. She disputed Anthem's assertion that the deal would save money for consumers.
Claims of medical cost savings are not "merger-specific, they are not verifiable and it is questionable whether they are 'efficiencies' at all," Jackson said.
Physicians and consumer advocates hailed her decision.
The American Medical Association said the ruling concludes that "Anthem's strategy of gaining size to strongarm physicians would not have benefited consumers."
U.S. Sen. Richard Blumenthal, D-Conn., said insurers should not consolidate, but instead "grow and succeed as competitors.
Attorney General George Jepsen, who was a plaintiff for Connecticut against the merger, said in a statement: "I am confident that this ruling will withstand appeal."
And New York Attorney General Eric Schneiderman, who joined a multistate effort seeking a court order against the deal, said the ruling is a "significant victory for consumers."
With the loss of the deal, Anthem owes Cigna a $1.85 billion "breakup fee" under the terms of the agreement reached by the two companies in July 2015.
Payment will not likely come easily, said Jennifer Rie, a litigation analyst at Bloomberg Intelligence. The merger agreement extends to April 30 and after it expires, Cigna could walk away from the deal and claim the payment, she said.
"The assumption is Anthem would fight it," Rie said.
Anthem would not have to pay the fee if it proves Cigna committed a "willful breach" of the merger agreement. In her order, Jackson said Cigna's hostility to the deal was the "elephant in the courtroom."
In testimony, Cigna officials undermined the projections of future savings and the disagreement between Anthem and Cigna "runs so deep" that Cigna cross-examined the defendants' own expert, she said.
In addition, Cigna refused to sign Anthem's findings of fact and conclusions of law, saying they reflect "Anthem's perspective," Jackson said.
The judge's accompanying opinion detailing her reasons for ruling against the deal was filed under seal.
A bid by Aetna Inc. to buy Humana Inc. for $37 billion was blocked last month. The two deals would have reduced the ranks of big U.S. health insurers from five to three and made Anthem the largest by membership.
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