(Portal) – Shares of UnitedHealth Group fell about 5% on Wednesday after news that the U.S. Justice Department has opened an antitrust investigation into the healthcare group.
The Wall Street Journal reported just before the market closed on Tuesday that investigators were interviewing health care industry officials in sectors where UnitedHealth competes to determine the potential impact of acquisitions by its health care provider Optum.
The reported investigation has added to investor jitters as an outage resulting from a cybersecurity attack at the Change Healthcare unit is now in its eighth day.
“This past headline week was tough for UnitedHealth,” said Stephens analyst Scott Fidel.
At $485.98, UnitedHealth's market value may have lost more than $25 billion, translating into a loss of about $11 billion as of Tuesday, according to the WSJ report.
Stocks were the biggest drag on the blue-chip Dow Jones Industrial Average index on Wednesday.
Fidel said the reported investigation represents another layer of uncertainty for health insurers like UnitedHealth, which recently warned of high medical costs due to an increase in care for older adults.
Shares of rivals Humana and CVS Health fell nearly 1% and 2.4%, respectively, in morning trading.
Morningstar analyst Julie Utterback said: “CVS and Humana also have nursing ambitions, so this investigation could have implications for those two… especially if the investigation eventually spreads.”
WSJ reported that investigators have interviewed industry representatives on topics including specific relationships between the company's insurance unit UnitedHealthcare and its health care provider Optum, which includes physician groups, among others.
Separately, Change Healthcare said in an update on its status page on Wednesday that disruption from the hack incident was expected to last at least the entire day.
Several pharmacy chains, including CVS Health, said the outage had impacted their business.
(Reporting by Christy Santhosh in Bengaluru; Editing by Sriraj Kalluvila and Shinjini Ganguli)