Appeals court upholds decision to block Anthem bid for Cigna

Appeals court upholds decision to block Anthem bid for Cigna

Appeals court upholds decision to block Anthem bid for Cigna

Both companies have the option of pleading with the appeals court to re-consider the case or appealing with the Supreme Court.

It looks like it's probably the end of the Anthem-Cigna merger. In a call earlier this week with analysts, Anthem Chief Executive Joseph R. Swedish said that how the DE court evaluated the situation would depend on the outcome in the antitrust appeal, and the company would "have to judge our go-forward position based on the decision of the appeals court".

For its part, Anthem argued that due to the medical savings gleaned from the merger would neutralize competition, according to Bloomberg.

"Everyone would agree that rock-bottom provider rates seem beneficial to consumers, but when those rock-bottom prices lead to inferior medical services, any benefit to the consumers' wallets is diminished by the harm to their health", it states. The 2-1 ruling upholds a lower court which concluded the merger would violate antitrust laws by reducing competition in Cigna's 14 states.

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A hearing is scheduled for May 8 in the DE court, where Cigna again will seek to opt out of the deal.

Anthem did not have an immediate reaction to the ruling.

This combo of file photos shows signage for health insurers Cigna Corp., and Anthem Inc. Kavanaugh said that rather than block the merger, he would have sent the case back to the lower court for further deliberations.

Anthem told the DE court in a filing on Wednesday that there were "meaningful opportunities" to complete deal, saying it was seeking a settlement with the Justice Department under the new Trump administration.

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"Accordingly, we affirm the issuance of the permanent injunction on alternative and independent grounds", Federal Circuit Court Justices John Rogers and Patricia Millett said. "The record, however, refutes rather than substantiates Anthem's proposed rebranding approach". While Aetna and Humana terminated their deal after losing at trial, Anthem appealed. A similar merger deal between insurers Aetna and Humana fell apart earlier this year.

Anthem's bid to complete the merger is likely over now.

Circuit Court Judge Brett Kavanaugh dissented saying cost savings would be passed on to consumers.

"The problem for this merger, if there is one, is in its effects in the upstream market - namely, in its effects on hospitals and doctors as a result of Anthem-Cigna's enhanced negotiating power".

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Cigna has already sued Anthem over the apparent failure of the merger, seeking $1.85 billion in breakup fees plus $13 billion in damages.

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