NEW YORK — The era of giant pharmacy managers that brokered prices between drug companies and insurers and employers has been upended, now that the $69 billion merger of CVS Health and Aetna, a big health insurer, has been approved by the Justice Department.
The merger can go ahead as long as Aetna sells off its private Medicare drug plans, the department said Wednesday.
CVS Health was the last of the large independent pharmacy managers to enter into deals with major insurers, consolidating control over the money that Americans spend on medical care and prescription drugs.
The deal is the latest in a flurry of combinations of health care companies in the past few years. Last month, the Justice Department approved Cigna’s takeover of Express Scripts, a CVS rival.
The companies involved say they will be better able to coordinate care for consumers as the mergers help tighten cost controls. But critics worry consumers could end up with far fewer choices and higher expenses.
“This type of consolidation in a market already dominated by a few, powerful players presents the very real possibility of reduced competition that harms consumer choice and quality,” said George Slover, senior policy counsel for Consumers Union.
The organization had opposed the merger, arguing that people enrolled in Aetna health plans could be forced to seek care at CVS retail clinics, and that those who were not insured by Aetna could pay higher prices for drugs than those who were.
The country’s three largest pharmacy benefit managers, or PBMs, have wielded tremendous power for decades, negotiating with drug companies over the prices of brand and generic drugs, and acting as go-betweens for employers and insurers.
Amid a growing outcry over the high prices of medicines, pharmacy managers have been vilified alongside drug makers. Critics point to pharmacy managers’ secretive deals that they say enrich companies while failing to benefit consumers.
In addition to the two major entities now attached to powerful health insurers, OptumRx, another major pharmacy manager, is owned by UnitedHealth Group, parent of the large insurer. Anthem, which operates for-profit Blue Cross plans in several states, is developing its own in-house pharmacy operation.
“There are going to be mammoth organizations,” said Adam J. Fein, CEO of Drug Channels Institute, a research firm.
The role of pharmacy benefit managers has changed. Generic drugs now account for 90 percent of prescriptions, and higher drug prices are largely a product of the increase in expensive specialty medicines for conditions like rheumatoid arthritis or cancer.
“The job of the PBM is being transformed,” Fein said.
Facing the prospect of competition from outsiders like Amazon, whose forays into the pharmacy business have already shaken up the industry, established players have also been looking for ways to stay relevant to their customers and enlarge their share of the health care market.
The companies “are feeling pressure to do something different or it will be done to them,” said Brian Marcotte, chief executive of the National Business Group on Health, which represents large employers.
Some employers are looking for alternatives. Amazon, JPMorgan Chase, and Berkshire Hathaway announced plans to form a new company to address the high costs and frustrations that their employees must contend with as they navigate the existing system.
Although the Justice Department appears willing to allow so-called vertical mergers by companies that do not directly compete, Aetna said it would sell its private Medicare drug plans to WellCare Health Plans to address concerns the combined companies would control too much of the market.
State regulators and consumer groups have also raised concerns, saying the lack of large pharmacy managers that aren’t affiliated with insurers could make it difficult for smaller competitors in either sector.
Much of the enthusiasm over CVS’s acquisition of Aetna has focused on the potential for CVS to use its 10,000 pharmacies and 1,100 retail clinics to deliver health care.