NCPA, NACDS Voice Concerns over Proposed Express Scripts-Medco Merger

Kate H. Gamble, Senior Editor
Published Online: Friday, July 22, 2011
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On July 21, Express Scripts, Inc. and Medco Health Solutions, Inc. announced that they have entered into a definitive merger agreement “to lower the cost of prescription drugs and improve the quality of care for Americans."

The associations that represent pharmacists, however, aren’t quite sold in the idea.

In a joint statement, NCPA Executive Vice President and CEO B. Douglas Hoey, RPh, MBA, and NACDS President and CEO Steven C. Anderson expressed concerns that the merger would reduce competition and raise costs.

The move, they stated, will create “a middle man that is too big to play fair, and will have immense power to unfairly dominate the market. This combination will monopolize control of the supply line for brand and generic prescription drugs, threaten access to pharmacy patient care, and is a bad deal for America, for healthcare plans, for pharmacies, and—most notably—for patients.”

The two associations both work to represent the needs of community pharmacists and promote the community pharmacist as “the face of neighborhood healthcare.”
“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. This proposed merger will exacerbate PBMs’ detrimental effect on pharmacy patient care,” they stated.

In recent years, the profits of the major PBMs have increased by 400%, according to Hoey, elevating them to a level that he feels hinders fair competition.

"As Congress and federal regulators review this proposal, they should not overlook the near-monopoly it would establish in certain regions of the country and in the national mail order market—both for traditional and specialty drugs,” Hoey stated. Combining two companies of that scope would “effectively eliminated competition,” he added.

“While NCPA believes that the choice between a community pharmacy and mail order should reside with the patient, those who opt for mail order deserve choice and competition, too,” he said. “Combining their mail order facilities would concentrate 59% of the mail order market in one company, according to 2011 Atlantic Information Systems data. In 2009, the combined specialty drug market share for ESI and Medco stood at 52%. It is vital to patient care and cost containment that there be real competition in the burgeoning specialty drug market where patients are faced with serious life-threatening diseases and pay an average of $1,900 for a prescription.”

Hoey also believes that the proposed merger would undermine the foundation of Medicare Part D, “which is built around competition.”

He urges congress to instead focus on 2 legislative solutions that have been endorsed by NCPA: The Pharmacy Competition and Consumer Choice Act, would help protect the ability of patients to go to the pharmacist of their choice, and the Preserving Our Hometown Independent Pharmacies Act, which would grant community pharmacies the same negotiating leverage as large chains to secure contracts that put patients first.

For more on this topic, read the new NACP blog posting.

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