Washington – The American Medical Association says it is “alarmed” that Anthem may be taking advantage of changes in leadership in the Justice Department that would “bend antitrust laws” and result in a settlement of the federal case that has blocked Anthem’s merger with Cigna.
The AMA, the nation’s largest association of doctors, vigorously opposed the proposed $54 billion merger with Cigna, saying the marriage of the health insurance giants would drive down doctor fees and provide less choice for patients.
In a letter to Acting Assistant Attorney General Brent Snyder that also was sent to U.S. Attorney General Jeff Sessions, AMA CEO James Madara said he is alarmed by Anthem court filings saying the company “expects to close its merger transaction with Cigna through ‘resolution with a new DOJ’.”
“Moreover, an Anthem attorney stated in open court that the company believes that its prospects for a timely closing are enhanced by a ‘supportive’ Vice President Mike Pence,” Madara’s letter said.
Anthem is headquartered in Pence’s home state of Indiana.
In addition, a top contender to head the Justice Department’s Antitrust Division is a former lobbyist for Anthem who worked on the merger, Makan Delrahim. Anthem says Delrahim has not been involved in merger-related activities since he deregistered as a lobbyist in December.
The DOJ filed suit to stop the merger last summer and received a favorable ruling from U.S. District Judge Amy Berman Jackson last month. Anthem is appealing that decision, and oral arguments in the appeal are set for March 24.
“We find it implausible that the U.S. Department of Justice (DOJ), eleven states, and the District of Columbia — that have diligently and successfully prosecuted this antitrust merger case — could now be swayed to allow this merger to close pursuant to politically-driven settlement negotiations as Anthem has suggested,” Madara wrote. “To do so would cause irreparable harm to the integrity of the federal courts to adjudicate anti-competitive behavior in a fair and impartial manner, leaving consumers at risk.”
The Justice Department’s only comment about the letter was that, “The United States is contesting Anthem’s appeal.”
Connecticut is among 11 states that joined the Justice Department’s suit to block the merger.
“The state of Connecticut, which has its own antitrust claims independent of the federal government, is not involved in settlement talks and remains committed to its case,” said Jaclyn Falkowski, spokeswoman for Connecticut Attorney General George Jepsen.
Madara said, “We strongly believe that political influence should play no role in the enforcement of the antitrust laws and urge you to vigorously defend Judge Jackson’s ruling. “
Jackson ruled the merger of Anthem and Cigna – now the nation’s second and third largest health insurers — would be anticompetitive because it would create the single largest seller of health insurance to large commercial accounts in a market in which there are only four national carriers.
As Anthem continues to fight for the merger, Cigna has sued in a Delaware chancery court to end its relationship with Anthem, collect a $1.85 billion “breakup fee” and more than $13 billion in damages.
The merger agreement between Anthem and Cigna expires on April 30.
There is precedent for the Justice Department to have a change of heart. After the Clinton Justice Department won a lawsuit that accused Microsoft of abusing its power in the software business, the company was saved from being split by a settlement with the George W. Bush administration.
This story was updated at 6:25 p.m. with a comment from the U.S. Justice Department.