The U.S. Department of Justice filed a lawsuit against UnitedHealth Group to block its planned acquisition of medical tech company Change Healthcare. The regulator argued that the merger would be detrimental to the overall market as it would give UnitedHealth control over the majority of health care claims data.
The justice department said Thursday that the proposed merger would also stifle competition and give UnitedHealth an unfair advantage given its access to sensitive claims information from its competitors.
U.S. Attorney General Merrick Garland said if UnitedHealth, the nation's largest insurer, were to acquire the healthcare claims tech company, it would undermine the entire health insurance segment and stifle competition in the market.
The justice department said that If the merger were to proceed, UnitedHealth could have the means to access data on more than half of the nations' health insurance claims. The agency added that UnitedHealth could potentially use the data against its competitors for its own benefit.
UnitedHealth said the Justice Department had a "deeply flawed" stance based on speculation that does not represent the realities of the healthcare system. The company added that it would defend its position in the matter "vigorously."
U.S. President Joe Biden has made the competition a central pillar of his economic strategy, condemning what he deems an array of companies with "outsized market strength" and emphasizing the necessity of healthy competition for the economy, employees, consumers, and small businesses.
Biden has urged federal authorities to scrutinize large company mergers more closely. One of the sectors included in Biden's executive order on competition, which was issued in July, is health care.
UnitedHealth initially announced its plans to acquire Change Healthcare for $8 billion in cash in January 2021. The company said the deal to merge with the Nashville, Tennessee-based company would greatly expand its capacity to provide data analytics and revenue cycle management assistance, among other services, to customers.
UnitedHealth and Change claimed that the merger would help to reduce administrative costs, guarantee physicians were paid faster, and assist them in making some patient care choices more swiftly and easily.
The deal, including debts, was estimated to be worth roughly $13 billion. UnitedHealth planned to finalize the deal in the second half of 2021. Over the last 10 years, UnitedHealth has acquired more than 35 companies within the healthcare sector, leading regulators to call it a "serial acquirer" that is swiftly becoming too big for its own good.
UnitedHealth's share prices fell by more than 2% to $448.47 per share following news of the lawsuit.
