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WASHINGTON — The proposed merger of pharmacy benefit managers Express Scripts and Medco Health Solutions is expected to face close scrutiny from antitrust regulators because the combined company would have leverage over about a third of U.S. prescriptions filled.
News of the deal drew sharp criticism from the National Association of Chain Drug Stores and the National Community Pharmacists Association.
The deal “ creates a middleman that is too big to play fair and will have immense power to unfairly dominate the market,” NACDS president and chief executive officer Steve Anderson and NCPA executive vice president and CEO B. Douglas Hoey said in a joint statement. “This combination will monopolize control of the supply line for brand and prescription drugs, threaten access to pharmacy patient care and is a bad deal for America, for health care plans, for pharmacies and — most notably — for patients.”
NACDS and NCPA said they are consulting with the Federal Trade Commission, state attorneys general and other regulatory enforcement officials to determine their next steps.
“Unfortunately, practical and rhetorical actions by the PBM community have increasingly ignored, and treated with irrational hostility, the vital importance of the patient-pharmacist relationship,” the groups stated. “This proposed merger will exacerbate PBMs’ detrimental effect on pharmacy patient care.”
NCPA’s Hoey issued his own statement about the deal, which he urged Congress and the FTC to reject.
“The major PBMs already wield an unchecked, one-sided advantage in setting contract and reimbursement terms for community pharmacists, undermining their viability to continue serving patients,” he said. “Approval of this merger would further distort this marketplace, to the detriment of patients, true competition and lower prices.”
Analyst Helene Wolk of Sanford Bernstein & Co. estimated the probability of the merger closing at 80%. “We believe the proposed Express Scripts-Medco merger will only make an already consolidated PBM industry more concentrated,” Wolk wrote in a research note.
Still, she noted, “We expect that the fiercely competitive arena plus the emergence of UnitedHealth’s OptumRx as a leading player improve the likelihood of approval.”
