The Federal Trade Commission is taking a second look at acquisitions of pharmacy-benefit managers by two big drug manufacturers.
Merck & Co. last week said that the FTC had asked for more information on its 1993 purchase of Medco Containment Services for $6.6 billion. Meanwhile, SmithKline Beecham said its $2.3 billion purchase of Diversified Pharmaceutical Services in May was receiving additional scrutiny.
The investigations were expected after the FTC and another drug manufacturer, Eli Lilly & Co., settled antitrust charges in its acquisition of benefit manager PCS Health Systems.
Such firms manage pharmacy benefits for health plans and often create lists of preferred drugs, or formularies, to help control costs. Regulators fear that manufacturers will use ownership of benefit managers to exclude competing products from the formularies.
Lilly agreed that PCS would maintain an open formulary, which would include any drug approved by an independent committee (Nov. 7, p. 14). It also said that PCS wouldn't share with Lilly any proprietary information about competing manufacturers, such as their prices.
Both Merck and SmithKline said that they have policies in place, such as the option of open formularies, that protect competitors' interests.
Merck's stock dropped 63 cents per share to $36.63 in trading on the New York Stock Exchange Nov. 15, the day it acknowledged the FTC review. The stock of SmithKline, a London-based company with U.S. headquarters in Philadelphia, stayed at $31.13 on the exchange.
SmithKline made public the FTC's interest late on Nov. 14.