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NCPA, pharmacies file amended suit vs. PBM merger
September 11th, 2012
PITTSBURGH – The National Community Pharmacists Association and five pharmacy operators have filed an amended lawsuit against the merger of pharmacy benefit managers Express Scripts Inc. and Medco Health Solutions Inc.
Filing the suit Tuesday in U.S. District Court for the Western District of Pennsylvania were NCPA and Lech's Pharmacy Group, Means Lauf Super Drug, Skippack Pharmacy/Sellersville Pharmacy, Brighton Pharmacy and Value Drug Company/Value Specialty Pharmacy.
Late last month, Judge Cathy Bissoon dismissed most of the claims in the original antitrust lawsuit filed March 29 by NCPA, the National Association of Chain Drug Stores and nine pharmacy operators. Bissoon said in her decision, however, that the retail pharmacy plaintiffs had until Sept. 10 to file an amended complaint for certain claims.
"NCPA and the other plaintiffs believe that this merger poses such significant competitive problems for small-business community pharmacies and the patients that they serve that NCPA and the other plaintiffs felt compelled to further pursue the litigation," an NCPA spokesman stated in an e-mail on the filing of the amended complaint.
Yet some of the plaintiffs have decided not to go ahead with the suit. On Tuesday, NACDS and Klingensmith Drug, Kopp Drug, Hometown Pharmacies and Thompson Pharmacy filed a notice to voluntarily dismiss their claims.
In her Aug. 27 decision, Bissoon relinquished the plaintiffs' claims that the merged Express Scripts-Medco would have an anticompetitive impact on retail pharmacies in their capacities as purchasers and/or providers of prescription drugs and pharmacy services to consumers and large employers.
Still, Bissoon had allowed to proceed the retail pharmacy plaintiffs' claim that combined company would be in a position to use its market power to force specialty drug patients to use the PBM's own mail-order and in-house specialty pharmacies.
"By exercising its substantial market power post-merger, this unrestrained PBM will be able to reduce the quality of prescription drug care provided to tens of millions of patients by reducing its prescription drug reimbursement to retail community 'brick-and-mortar' pharmacies to well below competitive levels and by forcing patients to use PBMs' proprietary mail-order and specialty pharmacies," NCPA and the five pharmacy operators claimed in their amended complaint filed Tuesday.
"As a result, plaintiffs — retail community pharmacies throughout the United States that provide critical services to millions of patients — are threatened with substantial, imminent and irreparable harm as a result of this merger. This harm stems directly from the agreement between ESI and Medco to merge and their ultimate consummation of that merger; thus, the harm results from their coordinated action," the complaint said.
The amended suit also claims that reduced competition resulting from the combination of the two PBMs will lower the quality and limit the availability of pharmacy services for patients and hike patient health care costs through increased PBM fees and prescription drug prices.
"These anticompetitive effects violate the antitrust laws and require that the merger be unwound, that ESI divest assets acquired from Medco to protect pharmacies and consumers, or that the court take such action as it sees fit to protect those pharmacies and consumers," NCPA and the pharmacy operators claimed in the amended suit.
The NCPA spokesman noted that the amended complaint also includes a claim on the potential anticompetitive effects of the PBM merger in the specialty drug market, which he said "is virtually unchanged and which has already survived a motion to dismiss."