Retail News Breaks
New coalition emerges to oppose PBM merger
October 19th, 2011
WASHINGTON – A new coalition of consumers, businesses and community pharmacists nationwide has formed to speak out against the proposed merger of pharmacy benefit managers Express Scripts Inc. and Medco Health Solutions Inc.
Called Preserve Community Pharmacy Access NOW! (PCPAN), the coalition said Wednesday that it aims to inform policymakers, the public and the media that union of the two PBMs is anticompetitive and would curtail pharmacy choice and access.
"With a growing population competing for access to limited resources, Americans face enough challenges, including receiving equal and affordable access to quality health care. This is particularly true for lower-income and minority Americans," coalition chairman Eva Clayton, a former member of the House of Representatives (D., N.C.), said in a statement. "Creating a giant health care system middleman by combining Express Scripts and Medco will hurt quality, raise prices and limit access to our trusted community pharmacists.
"This simply is not in the best interests of patients, employers or health care in America, and I hope that Congress and the administration will stand up for American patients and oppose the merger," Clayton noted.
PCPAN described PBMs as "middlemen" and said they "already have a powerful and unfair advantage" in terms of setting prescription drug prices and reimbursement rates for community pharmacies. An Express Scripts-Medco merger would combine the No. 2 (Express Scripts) and No. 3 (Medco) PBMs, creating the nation's largest provider of prescription drug benefits with about a third of market.
According to the coalition, the combination of the two companies would produce a "mega-PBM" that would control much of the supply line of brand-name and generic drugs, resulting in higher costs for prescriptions that would need to be absorbed by employer health care plans and patients.
"This proposed merger is not in the best interest of consumers and raises some serious antitrust concerns," stated Dennis Archer, PCPAN's chief legal counsel. "The merger between Express Scripts and Medco would create a mega-pharmacy benefit management company with excessive control and concentrated market share. I am very concerned about the legal precedent this merger would set."
Express Scripts and Medco have said that the $29.1 billion merger, announced in late July, is slated to close in the first half of 2012, pending regulatory approvals.
"All Americans deserve to have affordable access to quality health care, and that certainly applies to America's seniors that are facing declining health and increasing health care costs — in many cases, on a fixed income," commented Thair Phillips, president of RetireSafe, a grassroots advocacy organization for seniors and a member of PCPAN. "Unfortunately, an approved merger would put an additional burden on this population, as well as other already underserved populations, by pushing access farther from reach. This could have devastating effects."
PCPAN is a project of the Pharmacy Choice and Access NOW (PCAN) coalition, which advocates for affordable access to health care and pharmacy services. PCPAN said that during the merger review process, it will build its membership of concerned groups and individuals and urge them to sign a petition against the merger that will be sent to the Federal Trade Commission and members of Congress.
One of those concerned groups is the American Consumer Institute, which on Tuesday said it has joined PCPAN. "This merger clearly takes very personal and important consumer decisions — like where to have their prescriptions filled — and places those decisions into the hands of a large corporation that cares more about profits than consumer choice," stated Steve Pociask, president of the American Consumer Institute Center for Citizen Research. "In addition, reducing the level of competition in the PBM industry will drive up prescription prices for consumers, which is something many cannot afford."
The Express Scripts-Medco deal has drawn sharp criticism from consumer groups and is opposed by pharmacy trade organizations, including the National Association of Chain Drug Stores and the National Community Pharmacists Association. NACDS has run print advertisements and aired radio spots to rally consumers against the merger, as well as set up a website in opposition to the deal, TooBigToPlayFair.com.
Last month, the FTC issued a second request to the two PBMs for more information on the merger agreement, a move that was lauded by NACDS and NCPA.
And published reports on Wednesday said that in November the Senate subcommittee on Antitrust, Competition Policy and Consumer Rights plans to hold a hearing to examine the Express Scripts-Medco merger deal.
*Editor's Note: Article updated with information on American Consumer Institute and Senate subcommittee hearing.
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