Express Scripts completed its $29 billion acquisition of Medco Health Solutions, creating the largest pharmacy benefits manager in the U.S. despite an aggressive advocacy campaign to fight the deal.
The Federal Trade Commission voted 3-1 to approve the deal between St. Louis-based Express Scripts and Medco, which is based in Franklin Lakes, N.J. The FTC announced that it had closed its investigation today.
“Our merger is exactly what the country needs now,” Express Scripts CEO and Chairman George Paz said in a news release. “It represents the next chapter of our mission to lower costs, drive out waste in healthcare and improve patient health.”
The companies, along with CVS Caremark's PBM, were the three largest pharmacy benefit managers. The combined company, which will be called Express Scripts Holding Co., has 45% market share, according to FTC Commissioner Julie Brill's dissenting statement.
Brill argued that the “game-changer” of a merger is a “duopoly with few efficiencies in a market with high-entry barriers—something no court has ever approved.”
However, the commission's statement said that deal is not anticompetitive.
“While this transaction appears to result in a significant increase in industry concentration, nearly every other consideration weighs against an enforcement action to block the transaction,” the FTC said . “Our investigation revealed a competitive market for PBM services characterized by numerous, vigorous competitors who are expanding and winning business from traditional market leaders.”