FTC requests additional information on ESI-Medco merger
NEW YORK — The proposed merger between pharmacy benefit managers Express Scripts and Medco Health Solutions hit a speed bump Friday as the Federal Trade Commission requested additional information, indicating that the deal has raised antitrust concerns among regulators.
According to the filing, the waiting period for the merger legally required under the Hart-Scott-Rodino Antitrust Improvements Act was scheduled to expire Friday, but the FTC’s request, officially called a "second request," extends the waiting period by 30 days after ESI and Medco have fulfilled it.
Both companies still expect the $29.1 billion deal, announced in July, to go through in the first half of 2012.
"That was an expected part of the review process," an ESI spokesman told Drug Store News. "We are looking forward to working with the FTC, as we have been, and even though the timeline for the antitrust review is not fixed, we’re confident of a positive review."
The FTC’s move drew applause from pharmacy groups that had opposed the merger.
"This is an important step in the careful consideration of a proposed merger that would have anticompetitive effects on patients, consumers, the market and the entire healthcare delivery system," a joint statement by National Association of Chain Drug Stores president and CEO Steven Anderson and National Community Pharmacists Association EVP and CEO Douglas Hoey read. "As we indicated to the FTC in our formal letter, NACDS and NCPA are concerned that the merger would result in a consolidated PBM with excessive market power, ultimately to the detriment of consumers."
The Independent Specialty Pharmacy Coalition echoed the the NACDS’s and NCPA’s sentiments.
"The ISPC commends the commission on issuing a second request in the review of a merger that would combine two of the three largest pharmacy benefit managers and the two largest specialty pharmacy companies," ISPC executive director Russell Gay said. "We are glad to see the FTC will be taking a detailed look at how further consolidation of the PBM and specialty markets may negate efforts to contain healthcare costs."
Safeway: Flu shots during food trip more convenient
PLEASANTON, Calif. — Safeway on Tuesday announced its offering of flu shots in its grocery stores — positioning its flu season inoculation as more convenient to drug stores.
"Safeway makes getting a flu shot more convenient than most other retailers offering immunizations, because consumers visit grocery stores on a regular basis," the supermarket chain stated. "In an average month, 49% of those surveyed said they visit grocery stores most often, compared [with] 8% who said they visit drug stores most often."
As previously reported by Drug Store News, as an added incentive to consumers, each Safeway flu shot comes with a 10% off coupon for groceries.
According to the company, Safeway pharmacists have administered more than 5 million shots over the past decade to shoppers during their routine trips to the grocery store. Safeway’s immunization services include influenza, whooping cough, shingles, pneumococcal disease, meningitis, hepatitis A/B and human papillomavirus.
“As a pharmacist and a busy mom, I know that it’s not always easy to put your health first. Sometimes, an ounce of prevention is difficult to achieve with full schedules of family activities and holiday events,” said Risa Vatanka, pharmacist and immunization specialist at Safeway. “By offering flu shots in our pharmacies, Safeway can help people get more done in one trip to the grocery store.”
Costco is in good hands with Jelinek at helm
WHAT IT MEANS AND WHY IT’S IMPORTANT — While news media fret over what effect Steve Jobs’ departure from Apple will have on that company, it’s clear that Jim Sinegal is leaving Costco Wholesale in capable hands as he prepares to step down as CEO and hand leadership over to president and COO Craig Jelinek.
(THE NEWS: New leadership era begins at Costco. For the full story, click here)
It’s no surprise that when Sinegal, who cofounded Costco with chairman Jeffrey Brotman in 1983, announced his plans to retire, the company posted strong fiscal-year and monthly sales results on Aug. 28. The mass-merchandise club retailer has managed to deftly pull itself through the economic crisis and subsequent weak economy over the past three years. To say that Sinegal gave the company his best effort would be an understatement: As Barron’s magazine reported in March when it named him one of the 30 best CEOs, after a trip to Asia to look for places to open new stores, he landed near Costco’s Issaquah, Wash., headquarters, took a quick shower and was in the office by 9 a.m.
Over the last 28 years, the company has distinguished itself with a corporate culture that has set it apart from most mass merchandisers, but also made it a pioneer. Instead of category management, the chain focuses on "item management" that allows it to turn any SKU into an overnight sensation. The company also has distinguished itself as an employer, offering generous benefits packages to employees ranging from salaried executives to part-time workers in the stores.
Jelinek, who has worked for the company since a year after its founding, plans to keep that culture intact, meaning that while Sinegal’s planned Jan. 1 departure may mark the end of an era, the next era won’t differ too much from the last one, and that’s probably a good thing.