The pending $29 billion merger of Express Scripts Inc. and Medco Health Solutions Inc. is “not bad for a couple of middlemen,” National Association of Chain Drug Stores chairman Bob Loeffler said this month during a withering attack at the organization’s Regional Chain Conference.


Express Scripts, Medco Health Solutions, National Association of Chain Drug Stores, NACDS, Bob Loeffler, Regional Chain Conference, H-E-B, David Snow, health care costs, George Paz, PBM, pharmacy benefit managers, Pharmaceutical Care Management Association, PCMA, pharmacy, NACDS RxIMPACT Day on Capitol Hill, Steve Anderson, Geoff Walden






































































































































































































































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Loeffler blasts Express Scripts-Medco deal

February 27th, 2012

NAPLES, Fla. – The pending $29 billion merger of Express Scripts Inc. and Medco Health Solutions Inc. is “not bad for a couple of middlemen,” National Association of Chain Drug Stores chairman Bob Loeffler said this month during a withering attack at the organization’s Regional Chain Conference.

Loeffler, who is also chief administrative officer of H-E-B, noted that Medco chairman and chief executive officer David Snow is in line for a $39 million golden parachute.

“Now who does it look like has been using the lack of transparency to shovel big money their own way as opposed to driving health care costs lower?” he asked at the conference this month at the Ritz-Carlton here, where attendees include Express Scripts representatives.

“In Texas they say that if it looks like bull crap, and it feels like bull crap and it smells like bull crap, then it probably is genuine grade A pure D bull crap,” he said.

Loeffler said the intent of Snow and Express Scripts chairman and CEO George Paz can be discerned from a comment Snow made at a Cleveland Clinic conference in October.

Loeffler quoted Snow as saying, “I’m not dissing retail, but there’s a fiction that a pharmacist comes out and dialogues with you. In reality a high school student hands you a script from the shelf.”

Snow went on to talk about Medco’s robots being 23 times more accurate than human pharmacists.

“Suffice it to say that we’ve noted Mr. Snow’s words and we’ve heard NACDS members and we’ve heard from consumer groups,” Loeffler remarked.

He said the threat to pharmacy from lack of awareness “is being eclipsed by outright hostility, disregard and attack” by some pharmacy benefit ­managers.

PBMs have employed harsh rhetoric and tactics, he said, displaying a Pharmaceutical Care Management Association (PCMA) ad presenting Medicaid policy makers with a choice between cutting a little girl’s basic medications or cutting “billions in pharmacy ­overpayments.”

“Raise your hand if you’ve had billions in overpayments,” Loeffler said to laughter. He then showed another ad likening drug store negotiations of their payment regulations to a fox guarding a henhouse. “If you think we’ve been too hard on the PBMs raise your hand,” he said, adding, “No one’s raising their hand.”

Just as the lack of awareness of pharmacy’s value hurt public policy, increased rancor from PBMs is being accompanied by “a damaging array of PBM practices, all of which you personally know too well,” he said. These practices include a “take it or leave it” attitude, lack of transparency, more market compression each year, restrictive networks, unreasonable and capricious audit rules, use of patients’ data, and mandatory mail order, he said.

The practices “threaten the sustainability of many in this room,” he added, as well as accessible and affordable care.

He noted that the NACDS board has voted to make PBM issues a major target of the association’s public policy advocacy, along with Medicaid and Medicare.

Citing cost pressures on the federal government, Loeffler added that “due to the almost total ignorance in Washington about the private health industry in general and the pharmacy industry in particular … bad policy and regulation decisions are in danger of being made every day.”

For example, the recently published average manufacturer price rule will cut reimbursements for Medicaid prescriptions by 30% to 60%, he said.

He urged attendance at NACDS RxIMPACT Day on Capitol Hill next month. “If you can envision the possibility of your company being pushed off the edge of a cliff as a result of policies that aren’t right and jeopardize patients’ care then you need to be with us. You need to be with us in Washington, D.C., on March 21 and March 22.”

NACDS president and cfief executive Steve Anderson said following Loeffler’s speech, “As I tell my kids, you don’t start any fights, but your sure do finish them.”

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