By Rita R. Robison
It’s troubling that the Federal Trade Commission didn’t stop the merger of the two largest pharmacy benefit managers, Medco and Express Scripts Inc.
A pharmacy benefit manager is a third party administrator of prescription drug programs. They’re mainly responsible for processing and paying prescription drug claims. They also are responsible for developing and maintaining the “formulary,” contracting with pharmacies and negotiating discounts and rebates with drug manufacturers.
Medco and ESI announced a $29 billion merger agreement in July 2011. The combined company would have more than 155 million American customers – creating a virtual monopoly that could lead to fewer independent community pharmacies, reduced access to generics and specialized treatments, and fewer options for consumers.
“I am deeply disappointed by the FTC’s decision to allow this $29 billion merger to proceed, creating a monolithic PBM with near monopolistic control of the prescription drug sale marketplace,” Representative G.K. Butterfield (D-NC) said in a statement.
“For many months I have warned the FTC to carefully consider this merger’s negative impact on the industry and consumers alike. The FTC’s decision puts community pharmacies, seniors, and sensitive populations at risk of having less access and choice for purchasing needed prescription drugs.”
The merger was subject to review by the FTC, which decided on a 3-1 vote not to oppose the merger. FTC Commissioner Julie Brill issued a dissenting statement opposing the decision and expressing concern that the merged company would hurt consumers and the industry.
The merger has been challenged in federal court. Several states may bring legal action to prevent it.
