Express Scripts Chairman and CEO George Paz—who would remain CEO of the newly merged company, based in St. Louis—defended the deal last month, telling the House Judiciary Subcommittee on Intellectual Property, Competition and the Internet that combining the two companies would lead to efficiencies and lower costs while preserving competition with remaining firms.
But on Tuesday, a spokeswoman said a subcommittee in the Senate now also plans to investigate the merger. The Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights plans to convene a hearing on the merger in November, according to a staff member for subcommittee chairman Herb Kohl (D-Wis.).
“We are very receptive and appreciative of the news that another hearing will be forthcoming, because we believe that the continued scrutiny of this mega-merger is appropriate and certainly in the best of consumers,” said Chris Krese, spokesman for the National Association of Chain Drug Stores.
Kevin Schweers, spokesman for the National Community Pharmacists Association, said in an e-mail his group hopes the Senate hearing would expose the “costly middleman practices” that drive up healthcare costs and would increase following the merger.
Spokespeople for Express Scripts and Medco declined to comment on the announcement from the Senate antitrust subcommittee.
The Federal Trade Commission on Aug. 3 announced it was extending the time it needed to examine the merger before deciding whether to challenge it. In a filing with the SEC, the companies said they had expected the extension.
On Oct. 5, Reuters reported that a group of at least 25 state attorneys general had formed a coalition concerned about the merger, though they don't appear to have formal legal power to regulate the deal.
Express Scripts of St. Louis has offered to pay about $71.36 a share in cash and stock to buy all outstanding shares of Medco, which is based in Franklin Lakes, N.J. The payments would include $28.80 in cash and 0.81 shares of the new company in exchange for each Medco share.
David Snow, chairman and CEO of Medco, told the House subcommittee last month that consumers would benefit from the combination of Medco's expertise in advanced clinical pharmaceuticals and Express Scripts' expertise in behavioral science.
“By joining together, millions of members served by both of our companies will reap the benefits of these unique and complementary programs: increased prescription adherence and reduced gaps in care, resulting in better health outcomes and lower costs,” Snow told the House members.