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Will the FTC intercede in the CVS-Aetna deal?: 5 things to know

Woonsocket, R.I.-based CVS Health entered into a definitive agreement Sunday to acquire Aetna for $69 billion, bringing together one of the nation's largest pharmacy benefit managers and one of its biggest health insurers, Fortune reports.

The deal comes nearly a year after a federal judge blocked Aetna's $37 billion proposal to acquire Humana citing antitrust concerns. Regulators also blocked a similar proposal to combine insurers Anthem and Cigna earlier this year.

However, it is unclear if either the U.S. Federal Trade Commission, the U.S. Department of Justice or both institutions will evaluate the proposed CVS Health-Aetna merger.

Here are five things to know about the deal.

1. Officials at both institutions said the deal, which represents the year's largest corporate acquisition, will capitalize on CVS' MinuteClinic business, which offers preventative services like flu shots, and offer those services to Aetna's roughly 23 million members.

2. The combined entity will also be able to better negotiate lower drug prices, and help CVS cut costs and serve as a less costly alternative to the traditional hospital emergency room, the report states.

3. Though CVS and Aenta are not direct competitors, federal regulators may sue to block the merger on the grounds that the proposed deal would limit consumer choice. Several investors told Fortune regulators may argue the deal would prevent Aetna customers from frequenting other pharmacies or contacting other PBMs.

4. The unidentified investors point to the Justice Department's decision to heavily scrutinize vertical mergers, or mergers between companies that are not necessarily direct competitors. The Justice Department sued to block AT&T's proposed $85.4 billion merger with Time Warner last month, stating the integration of a content producer with a distributor may reduce consumer choice, according to the report.

5. "[Aetna and CVS] want the FTC to [evaluate the deal]. The reason that the FTC is better at this point is that the Justice Department has just broken with decades of precedent of how to deal with vertical mergers," an attorney for the unaffiliated law firm Constantine Cannon told Fortune.

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