Independent Specialty Pharmacy Coalition Continues to Urge FTC to Block PBM Merger
The Independent Specialty Pharmacy Coalition (ISPC), a national group of community based specialty pharmacies, recently sent a letter to the Federal Trade Commission (FTC), urging the Commission to protect consumers and restrict anticompetitive conduct if it chooses to approve the proposed merger between Express Scripts, Inc (ESI) and Medco Health Solutions.
The Independent Specialty Pharmacy Coalition (ISPC), a national group of community based specialty pharmacies, recently sent a letter to the Federal Trade Commission, urging the Commission to protect consumers and restrict anticompetitive conduct if it chooses to approve the proposed merger between Express Scripts, Inc and Medco Health Solutions. Last year, the two pharmacy benefit management (PBM) companies announced plans to merge in a $29 billion deal that is currently being reviewed by the FTC. A final decision on whether or not the deal will be allowed to move forward is expected soon.
In the letter, ISPC expressed concerns about the impact of the merger on the over 50 million Americans who suffer diseases that require costly specialty drugs, such as cancer, infertility, lupus and various other severe diseases. The ISPC explains that this merger, "will deny consumer choice, reduce the quality of care, eliminate competition for physician referrals, and disrupt the treatment plans of the patients." While advising against approval due to antitrust concerns, the coalition suggested that if the Commission should decide to allow the transaction, approval should be contingent upon the entering of a consent decree containing a remedy designed to preserve competition in the market for specialty pharmaceuticals.
"Thousands of vulnerable patients and their physicians strongly prefer the comprehensive service they receive from their community pharmacy," the ISPC notes. "The merger will create a dominant PBM which will have the power to force patients away from their preferred specialty pharmacies and into the ESI's highly restrictive mail order network," the letter states. "These vulnerable patients will suffer from inferior service and higher prices... That's why a broad coalition of consumer groups, specialty patient groups and leading specialty physician groups have opposed this merger," the letter explains.
"An appropriate remedy would be to protect patient choice of these most vulnerable consumers. The Commission should prohibit exclusive specialty networks and prevent Express Scripts from coercing them to use ESI's mail order specialty pharmacy. We propose a behavioral remedy that would prevent ESI from implementing exclusive networks or unfairly favoring its internal specialty pharmacy to the detriment of independent specialty pharmacies. In order to adequately eliminate this discrimination, the FTC should also require pricing transparency by the PBMs, thereby ensuring that discrimination is not taking place."
The coalition says this remedy is not without precedent. In the letter, ISPC uses the final judgment in United States v. Comcast and the FTC's own order in the Matter of America Online, Inc., and Time Warner, Inc. as guide posts to outline a behavioral remedy scheme that would address the competitive concerns raised by this merger. According to letter, independent specialty pharmacies face a similar plight as the downstream competitors threatened by the Comcast/NBC and AOL/Time Warner mergers.
The combination of Express Scripts and Medco will create a monolithic PBM capable of directing the specialty pharmacy scripts for nearly 50% of the national market. The merged firm will be insulated from competition, and incentivized to drive out competitors and ultimately to raise consumer prices.
"Blocking this merger is the most direct and comprehensive manner to avert the competitive harm that would result from the establishment of such a dominant PBM," the letter continues. "If the Commission chooses to approve the merger we urge it to impose a remedy to protect these vulnerable consumers by prohibiting the combined Express Scripts from unfairly discriminating against independent specialty pharmacies and protecting patient choice."
About the Independent Specialty Pharmacy Coalition: The Independent Specialty Pharmacy Coalition (ISPC), established in 2010 by leading specialty pharmacy companies throughout the United States, provides a voice for pharmacy specialists with legislators and regulatory bodies. The ISPC is a leader in providing expertise to the FTC, CMS, TriCare, State Medicaid systems and the US Congress in matters pertaining to high cost drugs and the protection of medically fragile patients with chronic disorders such as hepatitis, hemophilia, multiple sclerosis, severe rheumatoid arthritis and cancer.
For more information, see the following article from August 2011 on Pharmacy Times: