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Coalition chides Express Scripts CEO for remarks
February 27th, 2012
WASHINGTON – Preserve Community Pharmacy Access Now! (PCPAN), a coalition formed last fall to oppose the merger of Express Scripts Inc. and Medco Health Solutions Inc., blasted Express Scripts chief executive officer George Paz for comments that the group said devalued the role of community pharmacists.
PCPAN said Monday that Paz slighted community pharmacists in remarks made during the question-and-answer portion of Express Scripts' fourth-quarter earnings call with analysts on Feb. 23.
The coalition, whose participants include consumers, businesses and community pharmacists, cited the following comment by Paz in the call when he was asked by an analyst about the concept of narrow retail pharmacy networks in prescription drug benefit plans: "Nexium is Nexium, Lipitor is Lipitor, drugs are drugs, and it shouldn't matter that much who's counting to 30."
Paz made the remark in explaining that patients generally are able to change to another pharmacy provider — such as going from Walgreens to Kroger or CVS — with little or no disruption if their benefit plan requires them to.
However, PCPAN claimed Monday that Paz's comment illustrates a pattern of anti-pharmacist statements on the part of the pharmacy benefit manager (PBM) and should call its merger deal with Medco into question.
"ESI and Medco have spent the last several months trying to defend their merger against claims it would result in decreased access to local community pharmacies, but recent comments demonstrate that ESI and Medco completely devalue pharmacists and show that the claims are indeed valid," PCPAN chair Eva Clayton, a former Democratic congresswoman from North Carolina, said in a statement. "Comments like this should raise serious concerns about how a combined company with such an attitude would treat pharmacies that provide important services and employ people in our communities. This is yet another reminder that this merger must be stopped."
For example, PCPAN said that in a Senate hearing last December, Paz testified that he "can't stop certain pharmacies from going out of business," while Medco CEO David Snow has commented that "Medco's 'robots' are '23 times more accurate' than human pharmacists, in terms of errors in dispensing prescriptions."
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. The deal is currently being reviewed by the Federal Trade Commission.
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.
"Nothing good can come from combining two health care giants that do not see the value in community pharmacists, and that have incentives to drive customers away from pharmacies and into their own mail-order programs," Clayton stated. "The truth is an approved merger could have a devastating effect on health care and jobs in this country."
Last week, PCPAN reported that over 100 employers nationwide sent a letter to the FTC to express their concerns about the proposed merger, particularly regarding the prospect of limited choice when shopping for pharmacy benefit plans.
"If the merger is approved, the company that emerges will manage the prescription plans for roughly 135 million Americans," the letter stated. "PBMs are already a highly concentrated industry, and this merger will only magnify that problem. Because of this concentration, the merger will result in even fewer choices in an already limited market for employers who are seeking cost savings in their various health plans."
In the Dec. 6 Senate subcommittee hearing, Paz testified that the union of Express Scripts and Medco would help make prescription drugs services more affordable and more effective for Americans. "We will lower drug costs that are far too high and improve health outcomes for consumers," he stated. "As the big drug companies merge, as large chain drug stores buy up their competition and demand higher prices, we must become more effective representing the interests of plan sponsors and consumers."
Snow testified at the hearing that the merger reflects the "transformation of America's health care system" to deliver more for less. He also explained that the PBM marketplace is highly competitive.
"The business of pharmacy benefit managers is characterized by robust competition, with more than 40 PBMs aggressively competing to provide differentiated value propositions for public and private payers of all sizes. Today, no fewer than 10 PBMs serve Fortune 50 companies, seven PBMs each process more than 150 million prescriptions annually, 12 PBMs serve more than 5 million members each, and at least nine PBMs serve large state accounts. Additionally, nine Fortune 500 companies operate PBMs directly for their employees."
Snow also pointed to retail pharmacies as strong competitors. "Non-PBM participants such as Walmart and Target offer low-price generic prescriptions, as do other retail pharmacies that are providing steep discounts on 90-day prescriptions. Retail chain pharmacies remain powerful — for every single prescription filled by mail order, eight are filled by large chain stores," he testified.
Independent pharmacies, too, remain key players in the prescription drug market, Snow told the subcommittee. "We recognize that some have voiced concern about the effect of an Express Scripts-Medco merger on retail pharmacies — particularly on independent community pharmacies. The facts are that more than 85% of prescriptions filled for Medco customers are filled through our networks of more than 60,000 retail pharmacies representing about 95% of all retail pharmacies nationwide. Even as our companies seek to drive efficiency in the health care system, retail pharmacies of all sizes will continue to play a crucial, complementary role to the mail order pharmacies operated by PBMs."