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Groups want state AGs to block Express Scripts/Medco merger

By Jessica M. Karmasek | Mar 30, 2012

WASHINGTON (Legal Newsline) - A coalition of public interest groups and leading competition advocates are calling on state attorneys general to block a proposed merger between Express Scripts Inc. and Medco Health Solutions.

The American Antitrust Institute, American Consumer Institute and public interest attorney and former Federal Trade Commission policy director David Balto made their plea during a teleconference hosted by the Preserve Community Pharmacy Access NOW! Wednesday.

The FTC is expected to render its final decision on whether the merger -- valued at $29 billion -- will move forward soon. In fact, in a filing this week, Express Scripts said federal regulators could sign off on the merger as early as next week.

Bringing the two pharmacy benefit managers together will lead to safer, better and more affordable pharmaceutical coverage care for Americans, the two companies say.

In particular, they say the merger will accelerate the ability to drive out "wasteful spending" and detect and close gaps in care.

However, the merger's critics argue otherwise.

"Consumers should not sleep well if this merger is not challenged," Balto said Wednesday.

"The merger will enable Express Scripts to raise prices and prevent consumers from using their community pharmacy. Going to court is the only way to prevent consumers from being coerced by a dominant PBM.

"That is the message that we are sending to state attorneys general today."

The groups say they plan to press the attorneys general to do "everything in their power," including filing lawsuits, to stop the merger's approval.

Already, a number of pharmacy service providers, consumer advocates, patient advocates, employers and others have contacted the FTC expressing concern about the impact of the merger.

The merger, itself, also has been investigated by the U.S. House Judiciary Subcommittee on Intellectual Property, Competition and the Internet, and the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.

"We hope that the states will make their concerns known to the FTC as well, and failing action by the FTC, use their own antitrust laws if necessary to block this merger as presently organized," said Dan Gustafson, member of the AAI advisory board.

"The proposed merger threatens to substantially lessen competition in this market segment and expand the reach of this new entity deeper into specialty and mail order pharmacy operations, resulting in increased prices to plan sponsors and ultimately consumers."

He added, "This merger should be stopped, plain and simply, but if not blocked completely, these companies should be required to divest their specialty and mail order operations."

Steve Pociask, president of ACI, agreed.

"Approving this mega-PBM merger would only exacerbate the conflicts of interest and concentration of market power that already exist in the PBM industry. There are no obvious benefits to consumers from this merger, but there are clear risks and likely damages."

The groups, which say attorneys general in New York, Pennsylvania, Ohio, Texas and California are considering filing suits, argue the two companies combined would control an "excessive" share of the market.

The monopoly, they contend, would lead not only to higher health care costs, but also reduced access to cheaper generic drugs and lifesaving specialty medications.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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