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Squabbles have apparently flared up behind the scenes in the proposed $53 billion merger of health insurance giants Anthem Inc. and Cigna Corp.
According to a Wall Street Journal report Sunday, sources on both sides say the disputes could delay or even threaten any antitrust agreements in pursuit of the deal, announced last summer.
The WSJ report cites a series of letters between senior officials, including their CEOs, in which the would-be partners accuse each other of violating last year's merger agreement and mishandling data and document submissions to regulators.
Another key issue involves Anthem's lawsuit against Express Scripts Holding Co., a large pharmacy benefits management company. The suit accuses Express Scripts of overcharging Anthem for prescription drugs, seeking nearly $15 billion in damages. One of the letters, from Cigna's chairman to Anthem's board, said the suit could hurt the prospects for regulatory approval and diminish the value of the merged company.
If the deal is consummated, it would create the largest U.S. health insurer by membership, with more than 54 million enrolled, and $117 billion in annual revenue. Another insurance megamerger proposal, a $37 billion deal between Aetna Inc. and Humana Inc., also was announced last summer.
While the Anthem-Cigna correspondence may not represent a complete picture of the relationship between the two companies, according to the WSJ it does raise concerns that deal is slipping behind the Aetna-Humana merger in the regulatory-review process. Officials believe it's better for Anthem and Cigna if both deals are reviewed on parallel tracks.
Modern Healthcare is a sister publication of Business Insurance.
Anthem Inc. on Wednesday said its net income plummeted 18.7% in the first quarter, as investment losses squeezed its bottom line despite gains in membership.