Antitrust case analysis. Health, Medicine, Nursing Essay

Antitrust Case Analysis
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Antitrust Case Analysis
Antitrust Trust Statutes
Antitrust laws are regulations that limit the power and influence of firms in markets to promote fair competition. They prohibit unfair market practices, including discriminative prices and monopolization. Under antitrust law, legal issues arise when a firm or cooperative conspires with another to control the market (Federal Trade Commission. 2020). The main federal statutes in antitrust laws are the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. The Sherman Act (1890) prohibits contracts and conspiracies that restrain trade or monopolize a particular industry. According to the Sherman Act, competing businesses or firms cannot fix prices, divide markets, or attempt to rig bids. The Federal Trade Commission Act, enacted in 1914, prohibits unfair competition methods and all deceptive practices or acts in businesses. The Clayton Act (1914) prohibits mergers when the effect may reduce competition in favor of the parties or create a monopoly. It addresses business and market-relates issues that are not clear under the Sherman Act, including discriminatory prices, services, allowances, and interlocking directories. Violation of any of the antitrust statutes attracts penalties in terms of legal fees and/or imprisonment.
The United States and the Plaintiff States V. CVS Health Corp., And Aetna, Inc.
(U.S. et al. v. CVS Health Corp. and Aetna, Inc. (D.D.C. 1:18-cv-02340-RJL, 2018))
CVS Health Corporation (CVS) is the country's largest retail pharmacy chain, while Aetna ranks third among the top largest health insurance companies across the country. Both companies are significant competitors in the sale of Medicare Part D prescription drug plans to individuals. The two companies had proposed a merger worth $69 billion. As a result, a one-count complaint was filed in the U.S. District Court for the District of Columbia on October 10, 2018, alleging a violation of Section 7 of the Clayton Act (U.S. Department of Justice. 2018). The Justice Department and the other five states filed suit to bar the CVS-Aetna merger. The Department claimed that the proposed joint venture would significantly reduce competition in the individual M.P.D. plan industry leading to a reduction in prices and quality. The lawsuit was resolved by having the parties enter into a settlement that required Aetna to get rid of its M.P.D. business. The Department of Justice held that CVS and Aetna Inc. must get rid of Aetna's M.P.D. Prescription drug plan business for them to merge. To resolve the Department's competition concerns, Aetna's individual PDP business was sold to WellCare Health Plans, Inc. on November 4, 2018.
The Impact of the Case On the Law and Power Brokers
On September 4, 2019, a federal district court judge signed and approved the CVS-Aetna merger. According to Richard Leon, a U.S. District Judge, the settlement proposed by the Justice ...