Half the states line up against ESI-Medco

If Express Scripts and Medco are right about the projected closing of what their opponents are calling the “mega-merger,” then we might be looking at dozens of more weeks of this.

(THE NEWS: NACDS urges consumers to prevent super-PBM 'stranglehold' on medicines. For the full story, click here)

DrugStoreNews.com users are far less optimistic than ESI and Medco executives, that’s for sure. As of Friday, 61% of users voting in the DSN online poll believed FTC regulators would kibosh the deal (1,446 votes), and each week since DSN began following the story in late July, that margin has widened considerably.

Certainly, the feathers continued to fly last week, beginning with the National Association of Chain Drug Stores’ newest ad campaign, which aims to derail the $29 billion deal that would give the new company more than 41% share of all prescriptions filled at retail, about 60% of mail order, and more than 50% of the specialty pharmacy market. The new print ad ran in the Oct. 4 edition of the Washington Post, and admonished readers not to “give Express Scripts and Medco a stranglehold on Americans’ medicines.”

Responding to DSN's coverage of the story, ESI spokesman Brian Henry noted in a post on DrugStoreNews.com, “Express Scripts greatly values the relationships it has built over the past 25 years with pharmacies of every [type]. Pharmacies are our partners, and we have built business and network relationships that have [ensured] safe and effective service to our customers.”

According to Henry, ESI has “played an important role in helping retail pharmacies gain the benefits of modern technology,” he added, citing payment processing and instant adjudication systems as two examples.

But the NACDS ads were just the tip of the iceberg. Last Wednesday, Reuters surfaced with a report that more than half of the states in the country had “formed a group concerned about the potential merger of the two massive pharmacy benefit managers,” citing a representative from the Pennsylvania state attorney general’s office. Other than Connecticut and Iowa, no other states were identified in the report, however.

While the states do not get a vote either way, with more than 25 states lining up in opposition of the deal, as Reuters reported, it does create extra pressure for FTC regulators who will have to decide the fate of the merger.

On a somewhat related front, Walgreens announced on Friday that it had reached an agreement with ESI related to two large Medicare plans in Puerto Rico that will enable members of those plans to continue to access Walgreens for their medicines, even after the current Walgreens-ESI agreement expires at the end of the year. As previously reported, Walgreens announced in July that it would exit the ESI network, citing unacceptably low reimbursement rates. Collectively, the two plans, MMM Healthcare and its sister plan, PMC Medicare Choice, cover some 200,000 Medicare beneficiaries in Puerto Rico.

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