Analysis Group Provides Support in Anthem, Cigna Merger Trial

BOSTON, March 9 -- Analysis Group, a private economics consulting firm, issued the following news release:

Analysis Group, one of the largest private economics consulting firms in North America, supported academic affiliate and key expert witness Dr. David Dranove, who testified on behalf of the U.S. Department of Justice, which sought to block the proposed merger of Anthem and Cigna. On February 8, Judge Amy Berman Jackson of the federal district court for the District of Columbia ruled that the proposed merger -the largest announced merger in the history of the health insurance industry - would violate federal antitrust laws, likely resulting in higher prices, decreased competition, diminished innovation, and fewer health insurance choices for consumers.

Dr. Dranove, the Walter J. McNerney Distinguished Professor of Health Industry Management and Professor of Management and Strategy at Northwestern University's Kellogg School of Management, was a primary expert witness for the DOJ on key economic issues, providing both affirmative and rebuttal testimony. In her opinion, Judge Jackson cited Dr. Dranove's testimony on many of the key issues, finding, for example, that "Dr. Dranove's methodology appropriately measured market concentrations" and concluding that "the Court finds that Dr. Dranove's analysis is more persuasive, and the merger will in fact result in the loss of head-to-head competition between Cigna and Anthem for national accounts in the fourteen Anthem states."

A team of economists from Analysis Group worked closely with Dr. Dranove providing support, including CEO and Chairman Martha Samuelson, Managing Principal Jeff Cohen, Vice Presidents Samuel Weglein, Dov Rothman, Noam Kirson, Maria Lauve, and Brad Rice, and Manager Maria Garibotti.

"It was very gratifying to be so involved in a landmark case such as this, as well as to work so closely with the excellent support team from Analysis Group," noted Dr. Dranove. "Together, I believe we made a significant impact for the DOJ and its legal team."

"We are proud to have supported Dr. Dranove and the DOJ in this important case," said Ms. Samuelson. "As Dr. Dranove's analysis and testimony made clear, allowing this merger to proceed would have lessened competition in what is already a highly concentrated market among the few carriers with sufficient resources to serve national accounts."

Anthem, which is contractually required to pay a "breakup fee" of $1.85 billion to Cigna if the deal is terminated, has appealed the decision. Cigna subsequently notified Anthem it had terminated the merger agreement and brought suit against Anthem, seeking to recoup the breakup fee as well as nearly $13 billion in damages as a result of the failed merger process. In response, Anthem filed for and received a temporary restraining order to prevent Cigna from ending the deal.

About Analysis Group:

Analysis Group is one of the largest private economics consulting firms in North America, with more than 700 professionals across 11 offices in the United States, Canada, and China. Since 1981, we have provided expertise in economics, finance, health care analytics, and strategy to top law firms, Fortune 500 companies, and government agencies. Our internal experts, together with our network of affiliated experts from academia, industry, and government, offer our clients exceptional depth of expertise.

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