NACDS Applauds Sen. Kohl's Letter to FTC on Proposed Express Scripts and Medco Merger

Published Online: Friday, February 3, 2012
Follow Pharmacy_Times:
The National Association of Chain Drug Stores (NACDS) applauded concerns raised by U.S. Senator Herb Kohl (D-WI) about the proposed Express Scripts and Medco merger in a letter to the Federal Trade Commission (FTC) Chairman Jon Leibowitz. Kohl issued the letter to the FTC as a follow-up to a subcommittee hearing he chaired last December about the proposed merger.

In the letter, Kohl outlined his concerns about the impact that this market-dominant company would have on reducing competition in the marketplace, and its potential effects on patient care, health plans, employers, and community pharmacy.

“Express Scripts’s proposed merger with Medco will unquestionably create a giant PBM that is substantially larger than any competitor, and will result in the combined entity having a dominant market share in mail order and specialty pharmacies. It will reduce choices for PBM services to health plan sponsors, especially large employers. And it has the potential to have profound effects on the ability of both community and chain drug stores to compete,” Kohl wrote in the letter to FTC.

Kohl also described skepticism that the proposed Express Scripts and Medco merger would result in cost-savings for patients, employers and health plans.

“There is considerable doubt that PBM mergers in the past have resulted in any savings being passed on to plan sponsors,” Kohl said. “While the promise that reduced reimbursement payments will in fact be passed on to plan sponsors is very speculative, the evidence we received at our hearing is that the threat to pharmacies is very real.”

“Senator Kohl outlined well-documented and serious concerns about this proposed mega-merger, many of which have been echoed by consumer groups, anti-trust watchdogs and others,” said NACDS President and CEO Steven C. Anderson, IOM, CAE. “NACDS appreciates the serious approach that Senator Kohl has brought to Congressional examination of this proposed merger, which NACDS has said from the outset would create a mega-PBM that is too big to play fair.”

Mike Bettiga, chief operating officer of NACDS-member Shopko Stores Operating Company, LLC, testified before Sen. Kohl and the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on the proposed mega-merger in December. He stressed that the proposed merger would negatively impact patients by limiting or completely removing choice in how they receive their pharmacy services, as well as restrict patient access to services offered by highly-trained community pharmacists who provide education on medications and recommend lower-cost alternatives.

During that same hearing, Kohl made a highly significant point during his statement which brought to light substantial concerns about the proposed merger. At the hearing, Kohl said, "It is notable that no large employer who privately expressed concerns to us wished to testify at today's hearing, often telling us that they feared retaliation from the large PBMs with whom they must do business."
Related Articles
Emphasizing the importance of promoting policies that improve patient outcomes and lead to healthier, safer communities, the National Association of Chain Drug Stores submitted a statement to the U.S. House Committee on Energy and Commerce Subcommittee on Health in lead-up to today’s hearing titled “Examining Public Health Legislation to Help Patients and Local Communities.”
In support of pharmacy refill reminder programs and other healthcare communications by pharmacies, the National Association of Chain Drug Stores recently filed comments with the Federal Communications Commission requesting regulatory clarification regarding prior consent for calls to consumers’ cell phones for healthcare notifications.
Legislation to help curb prescription drug diversion and abuse and protect patients in need of medications received support from the National Association of Chain Drug Stores this week.
In response to the announcement of a new healthcare program in the State of the Union address last night, and in recognition of ongoing Congressional initiatives related to healthcare innovation, National Association of Chain Drug Stores President and CEO Steven C. Anderson, IOM, CAE issued this statement.
Latest Issues
  • photo
    Pharmacy Times
    Health-System Edition
    Directions in Pharmacy
    OTC Guide
    Generic Supplements
  • photo
    Pharmacy Careers
    Specialty Pharmacy Times