Cigna-Anthem merger blocked by federal judge in US

The proposed merger between US health insurance giants Anthem and Cigna has come unstuck after a federal judge blocked the potential deal on the basis of antitrust legislation.

The judge in the case said that the merger - which would create the largest health insurance company in the US - could not go ahead as it would unduly reduce competition in the industry.

Cigna's attempted acquisition of Anthem was worth a potential $50bn, but judge Amy Berman Jackson's decision now puts the deal in jeopardy.

"The antitrust laws are designed to protect competition, and the claimed efficiencies do not arise out of, or facilitate, competition," Jackson wrote in the ruling.

It emerged in June 2016 that the regulator in Connecticut who was leading the review of the deal had personal, financial and familial ties to Cigna. Lawmakers in the state pressured the Obama administration into action relating to the acquisition, as well as another healthcare merger between Aetna and Humana.

The American Medical Association applauded the decision, hailing it as a victory for consumers.

"The AMA agrees with Judge Jackson's conclusion that Anthem’s strategy of gaining size to strong-arm physicians would not have benefited consumers," said AMA president Andrew Gurman.

"Instead, it would diminish prospects for innovation in health care delivery and payment."

It is not yet clear whether the healthcare firms are planning to appeal the ruling. In early morning trade on Wall Street, Anthem was 1.32% higher, while Cigna fell 0.87%.