Judge blocks $54B Anthem-Cigna deal: 7 things to know

A U.S. District Court judge sided with the Justice Department and blocked Indianapolis-based Anthem's proposed $54 billion acquisition of Bloomfield, Conn.-based Cigna on grounds the combined insurer would harm consumers and impede innovation.

Here are seven things to know about the decision.

1. Anthem said it will appeal the ruling. Officials said Thursday the insurer "promptly intends to file a notice of appeal and request an expedited hearing of its appeal to reverse the court's decision so that Anthem may move forward with the merger, which was approved by over 99 percent of the votes cast by the shareholders of both companies."

2. Cigna said it "intends to carefully review the opinion and evaluate its options in accordance with the merger agreement."

3. Judge Amy Berman Jackson filed the 12-page order Wednesday. She said the proposed merger would create one of the largest health insurers in U.S. history, but would also increase prices and hinder competition between national accounts — customers with more than 5,000 employees and often spread across two states — within the 14 states where Anthem operates Blue Cross Blue Shield licensed plans.

4. Judge Jackson also said the deal would "diminish the opportunity for the firms' ideas to be tested and refined, when this is just the sort of innovation the antitrust rules are supposed to foster." 

5. The opinion referenced disputes between Anthem and Cigna, such as the two payers accusing each other of breaching their acquisition agreement, as evidence the deal would not enhance efficiency or save the companies billions as Anthem argued. Judge Jackson said disagreements between the insurers were the "the elephant in the courtroom." She added, "Anthem urges the court to look away, and it attempts to minimize the merging parties' differences as a 'side issue,' a mere 'rift between the CEOs.' But the court cannot properly ignore the remarkable circumstances that have unfolded both before and during the trial."

6. Under the payers' acquisition agreement, Anthem owes Cigna a $1.85 billion breakup fee.

7. The American Medical Association applauded the decision, calling it a victory for consumers. AMA President Andrew Gurman, MD, said the "AMA agrees with Judge Jackson's conclusion that Anthem's strategy of gaining size to strong-arm physicians would not have benefited consumers. Instead, it would diminish prospects for innovation in health care delivery and payment."  

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