Senators Express Concern over Express Scripts-Medco Merger

Prior to a key Senate subcommittee hearing, three US Senators are questioning the proposed merger of 2 of the 3 largest pharmacy benefit managers (PBMs)—Express Scripts and Medco Health Solutions, according to the National Community Pharmacists Association (NCPA)

In a letter to Federal Trade Commission (FTC) Chairman Jon Leibowitz, US Senators Saxby Chambliss (R, GA), Johnny Isakson (R, GA) and Jerry Moran (R, KS), urged a “thorough and complete investigation” of the proposed union. They pointed to the power that the company, if combined, would potentially have, particularly in the specialty and mail order pharmacy markets, and requested that the FTC “take into account what impact this proposed merger could have on consumers and patients, on taxpayers, on the government, and on pharmacies.”

B. Douglas Hoey, RPh, MHA, CEO of NCPA, expressed gratitude for the Senators and all members of Congress “who have taken a stand for patients by voicing their doubts” about the merger, which he believes “would reduce patient choice and access to pharmacy services and ultimately result in higher prescription drug costs. While these companies may talk a good game to regulators and in congressional testimony, their actions suggest they are more concerned with rewarding Wall Street investors and lavish executive compensation than improving patient care or reducing costs. The latest example of this being the reported $83 million ‘golden parachute’ for five Medco executives, should the merger go through,” he said.

On December 6, the US Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing during which NCPA member Susan Sutter of Marshland Pharmacies in Wisconsin was scheduled to testify. In September, a House Judiciary Subcommittee held a separate hearing.

“We are very supportive of our Senators who urged the FTC to conduct a complete investigation of this merger which takes into account the potential—and expected—harm to Georgia’s community pharmacists and their patients,” said Jim R. Bracewell, executive vice president of Georgia Pharmacy Association.

With the Senators’ letter, now 27 members of Congress have voiced concerns about the merger. Their unrest is shared by a wide range of other public and private sector stakeholders. Recently, the American Antitrust Institute (AAI), the Small Business Majority and the Pennsylvania Pharmacy Council came out against the merger.

In its letter to the FTC, the AAI stated, “The merger will likely cause anticompetitive harm in the provision of PBM services to the large plan sponsors market segment. Because of the large PBMs’ vertical integration and enhanced buyer power, the merger will also likely cause anticompetitive harm in the specialty pharmacy and mail order pharmacy market segments.”

In addition, while the FTC continues to scrutinize the merger, at least 28 state attorneys general have formed a working group to conduct their own review, according to a Reuters article.