The Department of Justice (DOJ) on Wednesday approved the $69 billion proposed merger between health insurer Aetna and CVS Health.
The DOJ said its approval is contingent on Aetna selling its Medicare Part D prescription drug business.
Aetna said it reached an agreement last week to sell the plan to WellCare Health Plans.
That sale, once finalized, would "fully resolve the Department's competition concerns," the DOJ said.
“Today’s settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
The settlement was necessary, the DOJ said, because Aetna and CVS Health are "significant competitors" in the sale of Medicare Part D prescription drug plans to individuals.
Aetna and CVS have argued that a merger would improve health-care outcomes and reduce costs immediately.
They have plans to turn CVS’s 10,000 pharmacies and clinics into community-based sites of care with nurses and other health professionals available to give diagnoses or do lab work.
The merger also means that there will no longer be any independent pharmacy benefit managers in the U.S.
These drug pricing middlemen negotiate drug prices between drug companies and insurers.
Pharmacy benefit managers have been absorbed by insurers in recent years. The Justice Department last month also approved a merger between Cigna and Express Scripts, a pharmacy benefit manager.