American Medical Association, Department of Justice file counter-motions in CVS/Aetna hearing

The American Medical Association has fired back against a Department of Justice motion to change the terms of Tunney Act hearing in the CVS Health and Aetna merger case.

Three AMA witnesses - healthcare and antitrust experts - are scheduled to testify starting Tuesday, June 4.

"After the close of business on the Friday before a holiday weekend, without any warning to the American Medical Association, the DOJ moved to completely change the nature of a hearing that is just four business days away," the AMA said today. "The AMA has not prepared for an adversarial hearing. The court's original procedure for the hearing is indisputably permitted under the Tunney Act, and it should not be changed at this late date."

The DOJ filed the motion on Friday, May 24, and requested the federal judge to make a decision quickly.  The AMA filed its counter-motion today.

As of this posting, the court has released no order.

WHY THIS MATTERS

The DOJ and the AMA are in a court battle over the CVS Health and Aetna merger.

The DOJ approved the $69 billion deal late last year, contingent upon Aetna divesting of its Medicare Part D plans to satisfy anti-competitive concerns. Aetna sold the business to WellCare.

CVS Health closed the merger last November, but the company still needs to get final approval from U.S. District Court Judge Richard Leon.

Leon is exercising his right, under the Tunney Act, to question the DOJ's settlement agreement to have Aetna divest of its Part D plans. While Leon has the authority to question the agreement, he cannot deny the merger outright.

Earlier this month, Leon ruled in favor of the AMA in allowing for the testimony of three healthcare and antitrust witnesses. They are not subject to cross examination and there will be no opening or closing arguments, Leon said in his ruling.

THE TREND

The DOJ filed its motion Friday after Leon denied its previous motion to limit the scope of witness testimony.

CVS Health's motion to exclude the witness testimony was also denied.

WHAT THE DOJ WANTS

The DOJ is asking the court to clarify and amend its procedure because as it stands, the AMA is able to frame the issues without the government being able to prepare a meaningful response. The DOJ has no opportunity to test, or in any way rebut, the factual assertions that the witnesses will make at the hearing, according to the motion.

The procedure order also excludes testimony from the two primary witnesses for the DOJ.

The DOJ wants all witnesses at the hearing to be subject to cross-examination and to have all testimony limited to previously disclosed conclusions and analyses.

The DOJ wants the court to make a conclusion in its favor, but if Judge Leon rules otherwise, the government wants to have the opportunity to call Mike Radu and Dr. Nicholas Hill, as well as any other necessary witnesses, to rebut information presented by the AMA.

THEIR TAKE

"The DOJ has argued that there should be no concern that CVS could harm competition in the PDP (prescription drug plan) market by raising WellCare's cost to use CVS's pharmacy benefit management services and retail pharmacies," the AMA said. "The AMA has explained at length why this argument is far too simplistic, and it will present testimony in support of its position. Then, and only then, will the court be in a position to decide whether the DOJ has met its burden."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com