UnitedHealth shares fall after antitrust investigation report

(Reuters) – Shares of UnitedHealth Group fell about 5% on Wednesday after a report that the U.S. Justice Department had launched an antitrust investigation into the health care group.

Just before the market closed on Tuesday, investigators interviewed health care industry representatives in sectors in which UnitedHealth competes to determine the potential impacts of acquisitions made through its health services arm, Optum, the Wall Street Journal reported.

The reported investigation has heightened investor concerns as a service outage following a cybersecurity attack at a Change Healthcare unit extends into its eighth day.

“Last week was tough for UnitedHealth,” Stevens analyst Scott Fidel said.

At $485.98, more than $25 billion was set to be wiped off UnitedHealth's market value, extending a loss of about $11 billion on Tuesday following the Wall Street Journal report.

Stocks were the biggest drag on the Dow Jones Industrial Average on Wednesday.

Fidel said the reported investigation adds another layer of uncertainty for health insurers like UnitedHealth, which recently warned of rising medical costs due to rising care among seniors.

Shares of competing companies Humana and CVS Health fell by about 1% and 2.4%, respectively, in morning trading.

“CVS and Humana also have ambitions in caregiving, so this investigation could have implications for those two… in particular, if the investigation eventually catches on,” Morningstar analyst Julie Utterback said.

Investigators asked industry representatives about issues including some ties between the company's UnitedHealthcare insurance unit and its health services arm Optum, which owns physician groups, among other assets, the Wall Street Journal reported.

Separately, Change Healthcare said in an update on its status page on Wednesday that disruptions from the hacking incident were expected to continue at least throughout the day.

A number of pharmacy chains, including CVS Health, said the outage affected their business.

(Reporting by Christy Santhosh in Bengaluru; Editing by Sriraj Kalluvila and Shinjini Ganguly)