The Anthem Inc. (NYSE:ANTM) bid to acquire rival CIGNA Corporation (NYSE:CI) has received a major blow after a U.S appeals court upheld a lower court ruling that blocked the merger. The $48 billion merger appears to be dead for now as the federal court reiterated the deal should not proceed as it would lead to higher drug prices in the sector. The ruling all but dooms an acquisition push that has been in the works for two years.

 Anthem-Cigna Merger Blow

The ruling marks yet another setback for Anthem the U.S Justice department of Justice having already aired its opposition to the deal. Eleven states have also aired their opposition to the proposed merger. The company is now staring at a possible $1.85 billion break-up fee that Cigna is pushing on the deal collapsing.

Consumer groups opposed to the merger insist that the deal should not be allowed to sail through as it will leave consumers with limited options in the market. The two companies operating in the industry as independents instead of partners should lead to a higher level of competition that industry experts believe would guarantee better prices for consumers.

 Anthem Options

Anthem has always insisted that by buying Cigna it would be able to save $2.4 billion in costs consequently according consumers lower premiums. Failure to provide details of how it intends to achieve the same has seen the Justice Department conclude it does not have a real plan to guarantee such savings.

Anthem is aggressively pushing for the Cigna deal as it believes the same would allow it to negotiate for better prices with drug makers as well as hospitals and doctors’ groups. The company also believes the deal will allow it to add more customers in addition to cutting down on expenses when it comes to investing in technology.

Anthem stock was down by $0.41 in Friday trading session ending the day at lows of $177.89 a share.

While Anthem is still committed to seeing the deal completed it might have to start exploring other options. Humana Inc. (NYSE:HUM) according to analysts is seen as an attractive prospect that the insurer might have to consider as a merger partner given its offerings in different markets and locations.