Why Aetna is selling its Medicare Part D business

Aetna on Thursday announced it will sell its standalone Medicare Part D business to a WellCare Health Plans subsidiary as it awaits waits federal and state approval on a proposed $69 billion merger with CVS Health.

Aetna and CVS Health shareholders earlier this year voted to approve the companies' proposed merger.

According to the Wall Street Journal, Department of Justice officials were expected to require the companies to sell off parts of their Part D businesses to preserve competition in the Medicare Part D market. Recent data from Wells Fargo show CVS is the market leader in Medicare Part D business, with about 6.1 million members, while Aetna is the fifth biggest Part D seller, with about 2.2 million members.

Florida-based WellCare is a managed-care operator that works with both Medicare and Medicaid. WellCare currently has about 1.1 million Part D enrollees, the Journal reports.

About the Medicare Part D business sale

Aetna did not disclose the terms of the sale to WellCare. In a regulatory filing, the company said the purchase price is "not material."

According to the filing, the Medicare Part D deal will be effective at the end of the year. However, the Journal reports that the closing of the sale to WellCare is dependent on the closing of the CVS-Aetna deal, which officials expect to occur during the fourth quarter of 2018 (Wilde Mathews/Prang, Wall Street Journal, 9/27; Coombs, CNBC, 9/27; Humer, Reuters, 9/27).

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