While pharmacy chain CVS awaits federal approval for a proposed merger with a major U.S. health insurer, company executives are driving profit through higher sales of prescription drugs.
Revenue climbed 2.6 percent to $45.7 billion in the three months through March 31, the Woonsocket, R.I.-based company said Wednesday.
CVS Health also reported greater earnings from its prescription benefit management business, despite increased congressional scrutiny, with sales rising 3.2 percent to $32.2 billion. As drug costs grow, federal lawmakers have focused on whether companies managing prescription benefits should be more transparent on pricing.
The $69 billion merger between the drugstore chain and Aetna, which highlights the pricing issue, is on track to close in the second half of this year, CVS said.
The two companies are supplying additional information to the Justice Department in response to a request in February and are on-track to obtain the necessary state approvals, according to Chief Executive Officer Larry Merlo. The Florida Office of Insurance Regulation signed off on the deal earlier this month, he said.
The combination has faced criticism from influential groups like the American Medical Association and the American Antitrust Institute.
“The proposed CVS-Aetna merger should be rigorously scrutinized because it involves a firm that already possesses market power at one level of competition,” the medical association previously told the House Judiciary Committee. “If the resulting combination of CVS and Aetna harms competition in a single market, that would be sufficient” grounds for blocking it, the group said.
CVS Health and Aetna shareholders approved the transaction in March.
