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N.J. governor urged to oppose PBM merger
March 16th, 2012
ALEXANDRIA, Va. – New Jersey lawmakers have taken a stand against the proposed merger of Express Scripts Inc. and Medco Health Solutions Inc. and called on Gov. Chris Christie (R.) to oppose the deal, which would create the nation's biggest pharmacy benefit manager.
The National Association of Chain Drug Stores on Friday hailed the New Jersey Assembly for passing a resolution, by a vote of 54-16-8, to urge Christie to oppose the PBM merger. The resolution, Assembly Resolution No. 64, was introduced by Assemblywoman Linda Stender (D.) and doesn't require action by the state senate.
"The New Jersey Assembly deserves tremendous credit for passing this resolution, which demonstrates leadership in the face of tremendous risks for patient care, jobs and competitive markets," NACDS president and chief executive officer Steve Anderson said in a statement.
Currently, the Federal Trade Commission is reviewing the Express Scripts-Medco merger deal.
Noting that Medco is based in Franklin Lakes, N.J., the resolution cited data on the projected loss of jobs in the state if the merger is cleared by the FTC.
The resolution also described the proposed merger as anticompetitive. "Permitting the merger would result in unparalleled market concentration with the merged entity controlling at least 32% of all prescriptions, 50% of the large plan sponsor market
and over 50% of the specialty pharmacy market in the United States in addition to becoming the largest mail-order pharmacy in the United States, accounting for close to 60% of all mail-order prescriptions processed," the measure stated.
Both consumers and community pharmacies would be negatively impacted by the deal if it goes through, according to the New Jersey resolution.
"This market dominance will leave customers with limited bargaining power, allowing pharmacy benefit managers to charge more for their services. The increased cost will inevitably be transferred to the patient. The merged entity would also have greater power to steer plan participants to its own mail-order pharmacy by providing incentives such as lower co-payments, by limiting the pharmacies in the participant's network or by requiring mandatory mail-order prescriptions, thereby preventing the patient from using the pharmacy of their choice and restricting their access to community pharmacists," the resolution said. "Lastly, the merged entity would have a greater ability to drive down the reimbursement rates for community pharmacies, forcing pharmacies to raise prices and cut back on hours, services and employees, thereby threatening the existence of community pharmacies."
Anderson added that many retail pharmacy jobs in the state also are at stake.
"We would only add that while the resolution described concern for its figure of 7,200 New Jersey jobs related to Medco, retail stores with pharmacies in New Jersey employ more than 84,000 people," he stated. "Combine those economic considerations with the fact that New Jersey's neighborhood pharmacies help patients take their medications correctly, improving health and reducing costs by preventing costly forms of care down the road, and the reasons to oppose this merger in the Garden State and across the nation only magnify."
NACDS noted that over half of state attorneys general, more than 70 members of the U.S. Congress, national consumer groups and employers have expressed concerns about or their opposition to the Express Scripts-Medco merger deal.
Earlier this week, Preserve Community Pharmacy Access NOW! (PCPAN) — a coalition formed last fall to stand against the PBM merger — said it has collected more than 1,000 signatures on a petition urging Congress to oppose the deal and the FTC to reject it.
"An overwhelming number of groups and individuals nationwide feel an Express Scripts and Medco merger would be a serious step in the wrong direction," stated PCPAN chair Eva Clayton, a former member of the House of Representatives (D., N.C.). "I am pleased that the FTC is taking a close look at this deal and hope that after thorough review commissioners will see what so many others have been saying all along — that approving this merger would not benefit anyone except ESI and Medco and simply cannot be allowed to move forward."