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D.C. rally amplifies concerns over PBM merger
November 3rd, 2011
WASHINGTON – Community pharmacists joined with consumers and small-business owners and lawmakers in a press conference organized by the Preserve Community Pharmacy Access NOW! (PCPAN) coalition to urge Congress and the Federal Trade Commission to oppose the proposed merger of Express Scripts Inc. and Medco Health Solutions Inc.
NCPA chief executive B. Douglas Hoey speaks during the rally at the U.S. Capitol.
The rally at the U.S. Capitol building on Thursday, which featured remarks by Reps. Joe Courtney (D., Conn.) and Thomas Marino (R., Pa.), amplified concerns that the union of the two pharmacy benefit managers was anticompetitive and would negatively impact pharmacy care — in particular, threatening patient access to community pharmacies. Participants in the conference later met with representatives on Capitol Hill.
"If allowed to go forward, this merger would have devastating effects on consumers and small businesses, alike," Courtney said at the event. “In an industry that already offers few choices, further market concentration would squeeze out the community pharmacies many of us have come to trust the most."
The $29.1 billion merger deal, announced in July, would combine the No. 2 (Express Scripts) and No. 3 (Medco) PBMs to create the nation's largest provider of prescription drug benefits, with about a third of the market in terms of prescription volume. The merger is currently being reviewed by Congress and the FTC.
"Right now, there is not a level playing field, which is why I feel we need to act now," Marino stated. "I supported community pharmacies when I sponsored a bill that sets out to level that playing field — and that would not cost the federal government or anyone else a penny. As a matter of fact, it would actually lower the prices for independent pharmacies and they, in turn, would pass it on to the consumer. I continue to support community pharmacies now."
Also participating in the conference was the National Community Pharmacists Association, which along with other pharmacy industry groups has called the Express Scripts-Medco merger deal "too big."
"The current PBM marketplace is flawed, and we fear matters will only get worse if the Express Scripts-Medco mega-merger is approved. NCPA stands united in principled opposition with the Preserve Community Pharmacy Access Now! coalition, members of Congress like Thomas Marino and Joe Courtney, other consumer advocates, small businesses and a host of others," stated NCPA chief executive officer B. Douglas Hoey.
"Quite simply, the windfall profits of major PBMs have soared, and everyone else has been paying the price," he said. "To paraphrase independent pharmacist and NCPA member Joseph Lech during a recent Congressional hearing, we've previously heard PBM claims of reducing costs through mergers, but prescription prices keep going up, plan sponsors keep paying more, consumers are paying higher co-pays and pharmacies are being paid less. So where's the money going?"
Hoey noted that the deal, if approved, would give a single entity too much influence over the pharmacy benefits market.
"The marriage of Express Scripts and Medco would give one corporation control of nearly 60% of the mail order pharmacy market and 52% of the specialty pharmacy market. It could mean more wasteful mail order spending and higher price spikes for specialty drugs," he explained. "The already limited pharmacy management options for the largest health plans, including the federal government, will grow further captive to the major PBMs. Currently 42 out of the Fortune 50 largest U.S. employers use the 'Big Three' — Express Scripts, Medco or CVS Caremark. It is safe to say that if the merger is green-lighted, the remaining two companies would face little, if any, resistance to raising costs, reducing choice and otherwise putting their own interests ahead of those of employers, patients and others."
PCPAN, chaired by former Rep. Eva Clayton (D., N.C.), was formed last month to inform policymakers, the public and the media that the Express Scripts-Medco merger would stifle competition and curtail pharmacy choice and access.
"There is a reason that this merger has drawn criticism from a diverse set of voices throughout the country," Clayton said at Thursday's event. "If Express Scripts is allowed to merge with Medco, it is American consumers — particularly those in lower-income and minority communities — who will ultimately pay the price in the form of higher costs for lesser quality care. I hope that Congress and the administration will stand up for American patients and oppose the merger."
NCPA's Hoey added that the proposed merger highlights concerns reflected by pending legislation on competition in the prescription drug market.
"The unchecked, virtually unregulated growth and consolidation among PBMs also reinforces the case that Congress should pass companion bills S. 1058 / H.R. 1971, The Pharmacy Competition and Consumer Choice Act of 2011, and H.R. 1946, The Preserving Our Hometown Independent Pharmacies Act," he stated. "These bills would significantly boost the patient's choice of pharmacy while effectively curbing questionable PBM business practices that drive up health care costs."