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According to CVS Health Corp., its acquisition of Aetna Inc. closed on Nov. 28 after receiving the last required approval from a state regulator. But a federal judge appears to have other ideas.

According to CVS Health Corp., its acquisition of Aetna Inc. closed on Nov. 28 after receiving the last required approval from a state regulator. But a federal judge appears to have other ideas.

In a hearing on Dec. 3, Judge Richard Leon of the U.S. District Court for the District of Columbia said he might halt CVS and Aetna’s integration efforts while he reviews the $69 billion deal, according to The Wall Street Journal.

Though the Department of Justice approved the transaction in October — contingent upon Aetna selling off its stand-alone Medicare Part D assets — Leon has the authority to review that settlement, through a statute known as the Tunney Act, to ensure that the proposed remedy for any antitrust issue is in the public interest.

Following a Dec. 3 hearing in which he expressed skepticism about the DOJ’s settlement, Leon ordered the parties involved in the case to “show cause why I should not order CVS to hold its acquired Aetna business as a separate entity and to insulate the management of the CVS business from the management of the Aetna business, and vice versa, until I have made my determination as to whether to enter final judgment in this case,” according to court documents. Written arguments are due by Dec. 14, and Leon plans to hold a hearing on Dec. 18.

So can a federal judge actually halt an acquisition that the DOJ has already approved?

“I don’t believe the Tunney Act extends that far,” antitrust attorney James Burns of Akerman LLP tells AIS Health via email. “The reason why I say that is because, under the Tunney Act, the issue before him is the sufficiency of the remedy that the parties have agreed to, and whether it serves the public interest, not whether the merger itself should be enjoined.”

Thus, Burns says he’s confident that Leon will ultimately approve the CVS/Aetna transaction, as he’s not aware of any case where a federal judge, in the end, rejected a merger settlement that the DOJ proposed.

Just days before CVS Health Corp. said it closed its $69 billion acquisition of Aetna Inc., reports emerged that another retail pharmacy giant and health insurer— Walgreen Co. and Humana Inc. — are in preliminary talks to take equity stakes in each other.

Just days before CVS Health Corp. said it closed its $69 billion acquisition of Aetna Inc., reports emerged that another retail pharmacy giant and health insurer— Walgreen Co. and Humana Inc. — are in preliminary talks to take equity stakes in each other.

Walgreens and Humana are already collaborating on a pilot project in which the insurer opened senior- focused primary care clinics in two Walgreens stores in the Kansas City, Mo., region. Now the companies are in “wide-ranging” talks about either expanding that venture or taking stakes in each other, according to The Wall Street Journal.

If Humana and Walgreens do decide to establish cross-holdings in each other, it would be “a very interesting and shrewd play,” Rita Numerof, Ph.D., president and founder of Numerof & Associates, tells AIS Health.

“We know that a lot of outright M&A doesn’t deliver value at the end of the day,” she says. But taking equity stakes in each other isn’t a true acquisition, “so you don’t have all of the risks and costs associated with bringing [a] business under the umbrella of one that’s very, very different.”

In an note to investors, Leerink analyst Ana Gupte pointed to the upside for Humana. “Equity stakes are a way for the two companies to share economics across the different economic pools across clinical, MA distribution and associated retail pharmacy fills and front store sales, which can drive several hundred million dollars of value for [Humana] annually in EBIT [earnings before interest and taxes].”

But Jefferies analysts wondered if perhaps Walgreens might be the bigger winner, since the pharmacy business model “is under more direct attack from disruptive players than are health plans” and “partnering with [Humana] helps [Walgreens] drive market share.”

Jay Godla, a partner at PwC’s Strategy&, says that there could certainly be synergies produced by Humana and Walgreens buying stakes in each other. But any arrangements that are less than a full merger or acquisition can include issues around commitment, agility, not-so-well aligned goals and objectives, and inability to make quick decisions, he notes.

The talks reportedly going on between Humana and Walgreens “could be a starting point for a long-term future merger,” Godla adds.

On Nov. 26, CMS issued a proposed rule that would let Medicare Advantage and Part D plans limit coverage of certain drugs in the six “protected classes,” which include antidepressants, antipsychotics, anticonvulsants, immunosuppressants for treatment of transplant rejection, antiretrovirals and antineoplastics, AIS Health reported.

On Nov. 26, CMS issued a proposed rule that would let Medicare Advantage and Part D plans limit coverage of certain drugs in the six “protected classes,” which include antidepressants, antipsychotics, anticonvulsants, immunosuppressants for treatment of transplant rejection, antiretrovirals and antineoplastics, AIS Health reported.

Under CMS’s Contract Year 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule, plans would be able to:

• Implement broader use of prior authorization and step therapy for protected-class drugs than is currently allowed;

• Exclude a protected-class drug from a formulary if it represents only a new formulation of an existing drug (regardless of whether the existing drug is still on the market); and

• Exclude a protected-class drug from a formulary if its price increases, relative to the price in a baseline month and year, beyond the rate of inflation.

This is not the first time an administration has tried to make changes in Part D’s protected classes. In 2014, the Obama administration proposed a rule that, among other Part D changes, would have effectively removed the protected status of antidepressants, antipsychotics and immunosuppressants. After facing backlash from a number of health care stakeholders and lawmakers from both major parties, CMS backed off the proposal.

But some industry experts tell AIS Health it’s possible that the Trump administration’s plan could have more success than its predecessor.

“The concerns around beneficiary access to drugs in those classes is going to be similar, the same or maybe even greater than the Obama-era proposal,” Miryam Frieder, a vice president at Avalere, tells AIS Health. However, “the environment is different enough that there is certainly the possibility that one could see this moving forward.”

Wall Street analysts viewed the protected-classes proposal as good news for managed care firms.

“We remain bullish” on MA and Part D players in light of the potential new regulations, Leerink analyst Ana Gupte advised investors. She cited UnitedHealth Group, Humana Inc. and WellCare Health Plans Inc. as particularly likely to benefit, as well as Aetna Inc., Anthem, Inc. and Cigna Corp.