The CEOs of Express Scripts and Medco Health Solutions said during a congressional hearing that the merger of the pharmacy benefit managers will lead to lower costs, although opponents argued that the proposed deal is anti-competitive.
Lawmakers hear conflicting predictions about impact of Express Scripts-Medco merger
The House Judiciary Subcommittee on Intellectual Property, Competition and the Internet hearing, which was held Tuesday, addressed concerns about the proposed $29.1 billion deal.
Express Scripts and Medco, two of the three largest PBMs in the market, announced plans to merge in July. The companies later disclosed in federal filings that the Federal Trade Commission had requested additional information.
Joseph Lech, owner of Lech's Pharmacy, a five-pharmacy system in Pennsylvania, and Dennis Wiesner, senior director of privacy, pharmacy, and governmental affairs for supermarket chain H-E-B, said in their testimonies that the deal, if it is approved, would be a “tipping point” in the PBM market, leading to reduced competition and harming patients by raising prices.
The pharmacy benefit market has multiple PBMs that offer varied products in a range of geographic markets, according to Stephanie Kanwit, counsel for Manatt, Phelps & Phillips. She added that the market is fluid, noting Walmart's 2008 entry in the PBM sector.
The proposed deal has caused concern among consumer groups and independent pharmacists and pharmacies.
Organizations including the Consumers Union and Consumer Federation of America, as well as the National Association of Chain Drug Stores and National Community Pharmacists Association, have publicly opposed the deal.
“The reality is that the PBM business is extremely competitive and that competition will only be enhanced rather than diminished by the Express Scripts-Medco merger,” said Medco CEO David Snow in his testimony.
The merger has been compared to the 2007 merger between CVS and Caremark–a deal that did not require additional information from the FTC.
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