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Pharmacy groups urge “fundamental reshaping” of health care vertical merger policy

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ALEXANDRIA, Va. The Alliance for Pharmacy Compounding, American Pharmacists Association, American Society of Consultant Pharmacists, National Alliance of State Pharmacy Associations, and National Community Pharmacists Association collectively urged “reinvigorated and reimagined antitrust enforcement policy” in joint comments submitted Wednesday to the Federal Trade Commission and the Department of Justice Antitrust Division. Earlier this year, the agencies proposed new guidelines for determining how to evaluate and whether to approve potential mergers seeking to combine companies that don’t compete with one another but operate in the same supply chain.

Citing the recent CVS Health/Aetna and Cigna/Express Scripts mergers as well as the OptumRx affiliation with UnitedHealthcare, the pharmacy groups report that vertical consolidation in the pharmacy sector has yielded significant anticompetitive effects without promised improvements in cost or quality of care. The groups urge the agencies to use this opportunity to create a regulatory regime that does not allow these transactions to unduly harm healthcare access, quality, and service, and said:

“A growing body of research evidence, including from current and former agency officials, shows that vertical consolidation in healthcare has led to increased prices without offsetting improvements in quality. … Given the evidence of anticompetitive harm from vertical consolidation, we ask the federal antitrust enforcement agencies to consider renewed approaches to tackling concentration in the healthcare sector. Unfortunately, the Draft Guidelines largely restate conventional analytical approaches that have failed to protect competition and healthcare consumers. The agencies’ permissive approach to vertical mergers has allowed transformational consolidation in the healthcare system, therefore, we believe a fundamental reshaping of the agencies’ vertical merger enforcement policies is necessary.”

View the joint comments here.


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