Inside This Issue - News
NACDS, NCPA challenge Express Scripts-Medco deal
August 29th, 2011
ALEXANDRIA, Va. – Citing a potential anticompetitive impact on patients, consumers, the market “and the entire health care delivery system,” the National Association of Chain Drug Stores and the National Community Pharmacists Association (NCPA) have written to the Federal Trade Commission to formally express their opposition to the proposed merger of pharmacy benefit managers Express Scripts Inc. and Medco Health Solutions Inc.
In the letter NACDS and NCPA offered to assist the FTC in its assessment, examination and investigation “into the merger’s anticompetitive nature and its consequences” on patient access and consumer care.
“Our opposition stems from the fact that the merger would result in a substantial reduction of competition in already highly concentrated markets, including those involving PBM services as well as mail-order distribution services and specialty pharmaceutical services. This combination will control a large share of the supply line for brand and generic prescription drugs and thereby will have the ability to raise prices to plans and patients and limit access to pharmacy patient care. This will create harm not only to pharmacies but also to consumers,” says the letter signed by NACDS president and chief executive officer Steve Anderson and B. Douglas Hoey, executive vice president and CEO of NCPA.
“We hope the commission will ensure it has sufficient data and information from both Express Scripts and Medco and other stakeholders to make an informed decision that protects competition and patient care. We are available to assist the commission in its assessment in any way possible.”
In early August Express Scripts announced it was acquiring Medco for $29.1 billion in a transaction that would result in a significant consolidation of the PBM market. If the deal is approved, the new company would be the nation’s largest PBM, with about a third of all Americans relying on it to manage their prescriptions.
The transaction is contingent on approval by shareholders and regulators. The companies said they hope to complete the deal by early next year.
Atlantic Information Services Inc. currently identifies Medco as the largest drug benefit administrator in the United States with an 18.2% market share, followed by CVS Caremark Corp. and Express Scripts at 17.8% and 11.8%, respectively.
Rep. John Conyers (D., Mich.) has asked the House of Representatives’ Judiciary Committee to examine the planned merger. He outlined his concerns in a letter to committee chairman Lamar Smith. “I believe the committee should consider conducting a hearing to examine the impact that this merger would have on health care insurance, drug costs for corporations and for consumers,” Conyers wrote. “A hearing would also allow us to examine how the merger would affect competition, American employers, consumers, patients and pharmacists.”
Also opposing the merger deal is the Independent Specialty Pharmacy Coalition (ISPC), a group of community-based specialty pharmacies.
“The ISPC is requesting that the FTC immediately address this merger and protect the most vulnerable patients,” says ISPC executive director Russell Gay. “Allowing any PBM to acquire a dominant position in the specialty drug market will be a giant step backward in our nation’s efforts to improve health care and manage drug costs.”