Feds green-light ESI-Medco deal. Now what?
“Straight over the cliff.”
That may be the destination for many independent pharmacies now that the Federal Trade Commission unconditionally has approved the controversial merger of the nation’s second- and third-largest pharmacy benefit managers, a top pharmacy leader warned.
The warning came last week but took on more urgency Monday with the agency’s decision to green-light the marriage of PBM giants Express Scripts and Medco Health. The decision wasn’t unanimous: FTC commissioner Julie Brill warned in a dissent that the merger is an industry “game changer” that would lead to a “highly concentrated market … likely to enhance market power” in the managed prescription benefit arena.
Opposition to the merger plan had been building steadily among community pharmacy advocates for months, and reached a crescendo late last week when ESI confidently predicted the FTC would rule as it did Monday morning.
In response, nine retail pharmacy companies filed suit March 29, with the backing of the National Association of Chain Drug Stores and the National Community Pharmacists Association, to block the merger.
Leaders of both groups warned of potential catastrophic damage to pharmacy competition and to patients. Such a deal, if not stopped in court, will have “dire consequences for retail community pharmacies and their patients," NACDS president and CEO Steve Anderson predicted. NCPA CEO Doug Hoey added that “Community pharmacists are already over a barrel in [negotiating] with PBMs,” and warned that the ESI/Medco combination “would send that proverbial barrel straight over the cliff.”
Hyperbole? Maybe not. For many independent and regional chain pharmacies already struggling to turn a profit serving patients under low-reimbursement take-it-or-leave-it contracts with increasingly powerful PBMs, the emergence of a new third-party mega-player in managed pharmacy benefits represents what could be an existential threat. That’s particularly true when the combined PBM entity will be dedicated to steering tens of millions of patients into its own mail-order prescription centers, bypassing community pharmacy altogether.
What’s puzzling is why the FTC even considered such a marriage. Combined, ESI-Medco control pharmacy benefits for well over 100 million Americans. As reported by the San Francisco Chronicle, the merged PBMs could account for 1-in-every-3 U.S. prescriptions this year, according to Adam Fein, founder and president of Pembroke Consulting Inc.
Together with CVS Caremark, the industry leader, the Big Three manage the lives of more than 90% of the employees working for national employers, according to NACDS. And though ESI and Medco assert that the merger will boost market efficiency and save public and private health plans money, history is filled with examples of previous concentrations of market power that failed to live up to such promises.
Are the fears voiced by pharmacy stakeholders overblown? Let us know what you think.
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NACDS expands state team with hiring of advocacy expert Leigh Knotts
ALEXANDRIA, Va. — The National Association of Chain Drug Stores on Monday announced that state health policy professional Leigh Knotts will serve as director of state government affairs, responsible for advocacy in Alabama, Florida, Georgia, Mississippi, North Carolina, Puerto Rico, South Carolina and Tennessee.
Knotts will join NACDS’ state team, for a total of six state directors, all of whom report to Sandra Guckian, NACDS VP state government affairs.
NACDS stated that Knotts’ background as a state government affairs advocate will further strengthen its advocacy for community pharmacy and the promotion of community pharmacies’ role in improving patient health and reducing healthcare costs. She will work to advance NACDS state priorities with NACDS members and state partners in support of pro-patient, pro-pharmacy policies.
The expansion and enhanced role of NACDS’ state government affairs team represents the increased emphasis on community-pharmacy provided services at the state level. Pharmacists in every state can administer the influenza vaccine, with many states increasing neighborhood pharmacists’ authority to other offer immunizations, including tetanus, hepatitis and shingles. NACDS state priorities include addressing pharmacy benefit manager issues and demonstrating the importance of fair and adequate Medicaid reimbursement, NACDS said.
“We are thrilled to welcome Leigh to NACDS. The NACDS membership expects the association to place a high priority on state government affairs issues, and the caliber and capacity of the newly enhanced team shows that NACDS is executing aggressively in this vital area,” NACDS president and CEO Steve Anderson saod. “Along with maintaining a proactive footing at the federal level, NACDS is 100% committed to working with state associations and policy-makers to unleash the unsurpassed value of neighborhood pharmacies for the benefit of patient care.”
Knotts most recently worked in government relations at Berry, Quackenbush & Stuart, PA, and held multiple positions in the real estate industry.
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FDA OKs Levemir for pregnant women
NEW YORK — A diabetes treatment made by Novo Nordisk is safe for pregnant women, according to a recent decision by the Food and Drug Administration.
Novo Nordisk said Monday the FDA had approved Levemir (insulin detemir [rDNA origin]) for a pregnancy category B classification, meaning that when used by pregnant women, the insulin did not increase the risk of harm to fetuses. The agency’s decision was based on results of a clinical trial involving 310 women that compared Levemir to another insulin product.
The insulin is used to treat Type 1 and Type 2 diabetes.
Was the trial done on pregnant women as well? Wouldn't that pose a considerable risk to the mother and child? For an untested drug that could potentially harm the fetus, were the mothers involved in the trial aware of the risks?