NACDS, NCPA, nine retail pharmacy companies sue to block ESI-Medco merger
ALEXANDRIA, Va. — With as much as two-thirds of retail pharmacy operators’ business tied up in the potential Express Scripts-Medco merger, the National Association of Chain Drug Stores, the National Community Pharmacists Association and nine retail pharmacy companies on Thursday filed a lawsuit challenging the merger.
"This proposed merger of Express Scripts and Medco will have dire consequences for retail community pharmacies and their patients," NACDS president and CEO Steve Anderson shared during a press conference held Thursday at noon. "The PBM companies talk about savings that would result from this proposed merger, but there is no evidence that the merged company would pass any alleged savings on to consumers and employers."
"Community pharmacists are already over a barrel in [negotiating] with PBMs," NCPA CEO Douglas Hoey added. "This merger would send that proverbial barrel straight over the cliff."
According to the suit, a merged Express Scripts-Medco would reduce access and service to patients; reduce competition for PBM services, particularly to large plan sponsors; reduce competition for specialty pharmaceutical services; and reduce competition in mail-order services, allowing the combined entity to raise mail-order prices and drive business to their own mail-order pharmacies regardless of patient preference.
The three largest PBMs manage the lives of more than 90% of the employees working for national employers, noted Don Bell, NACDS SVP and general counsel. "The result will be more power for the PBMs to force patients and plans to use PBM-owned mail-order and [PBM-owned] specialty pharmacies and more power to raise drug costs by forcing patients to use more-expensive brand-name drugs that the manufacturers pay the PBMs to promote."
With regard to specialty drugs, PBMs already help define what is and is not considered a specialty drug, added Jennifer Mallon, NCPA general counsel, a factor that could pull prescriptions that would otherwise be filled in a traditional pharmacy out of that marketplace. Mallon distinguished the two drug groups as "designated specialty drugs" for those medicines defined as specialty drugs by PBMs versus "clinical specialty drugs" identified by a clinical need for special storage, control, security handling or patient monitoring to ensure successful clinical outcomes. "PBMs would be able to leverage their number of controlled lives to … force them into their own proprietary mail/specialty dispensing facilities for drugs that typically retail pharmacies have been able to provide."
This combination will control a large share of the supply line for branded and generic prescription drugs, and thereby will have the ability to raise prices for plans and patients, and limit access to pharmacy patient care. The ESI-Medco combination would cover more than 155 million Americans, or more than half of the U.S. population.
The lawsuit was filed in the U.S. District Court for the Western District of Pennsylvania.
The nine community pharmacies, representing both chains and independents and all with a presence in Pennsylvania, include Brighton Pharmacy, Hometown Pharmacies, Klingensmith Drug, Kopp Drug, Lech’s Pharmacy Group, Means Lauf Super Drug, Skippack Pharmacy, Thompson Pharmacy and Value Drug Co. Several of the individual pharmacies joining the suit noted that an ESI-Medco merger would comprise as much as 60% of their prescription files today.
According to the group, as many as 76 Congress leaders already have communicated their concerns directly to the FTC and more than 30 state attorneys general actively are investigating the competitive impact of the merger.
Criticism of the merger has come to the forefront in the past week as the FTC nears a decision. Speculation that the merger would receive a favorable decision from the Federal Trade Commission as soon as next week increased following Express Scripts’ Form 8-K filing to the Securities and Exchange Commission on Wednesday that the pharmacy benefit manger expected to close the deal.
The Preserve Community Pharmacy Access NOW! coalition Wednesday afternoon held a press conference making a direct appeal to attorneys general to block the ESI-Medco merger in the courts should the Federal Trade Commission approve the merger.
The service by trained professional's has to be one of the more important issues whether it be a doctor, nurse, or the insurance company itself. For things like finding the best aide personnes handicapées available should be at the top of the priority list and profits put on the back-burner.
If this merger is allowed to go through, the United States should just merge with China. Then last I checked we were not a socialist country. Insurance companies should have never been allowed to become as big as they are today. They are no longer serve the people who pay the premiums, they are only looking ahead to the big dollar sign and how much money the CEO's can walk away with. What ever happened to the laws our founding fathers set forth years ago? Have we become such a greedy society that it no longer matters what is best for the people that are insured, but what is best for the company. I realize that companies have to survive and be competitive, but really, where has the common good gone??
If this merger goes through it will be another indication that the government does NOT act as it speaks.........it will be saying that they support monopolies, encourage the ousting of small/independent business and the reduction of fair competition.......... SOCIALISM at it's finest!
FDA extends approval time for COPD drug by three months
NEW YORK — Regulators will take a few months longer to review the approval application for a new drug for treating chronic obstructive pulmonary disease, the drug’s developers said Thursday.
Forest Labs and Almirall said the Food and Drug Administration would require a three-month extension to complete its review of their application for aclidinium bromide, a maintenance drug for COPD. The FDA plans to complete its review and decide whether or not to approve the drug in July.
In February, the FDA’s Pulmonary-Allergy Drugs Advisory Committee voted 12-2 in favor of recommending the drug’s approval. Advisory committee votes don’t guarantee approval for a drug, but FDA decisions usually are consistent with them.
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FTC testifies on anticompetition potential of an independent pharmacy bloc
WASHINGTON — The House Judiciary Committee’s Subcommittee on Intellectual Property, Competition and the Internet on Thursday morning heard testimony regarding H.R. 1946, "Preserving Our Hometown Independent Pharmacies Act of 2011." Originally introduced by Reps. Tom Marino, R-Pa., and Louie Gahmert, R-Texas, the bill is intended to exempt independent pharmacists from antitrust regulation in an effort to bolster their negotiating powers with pharmacy benefit managers.
The Federal Trade Commission testified against the measure, stating that the bill would likely lead to higher healthcare costs due to diminished competition.
"Health plans would be forced to pay higher drug dispensing fees to pharmacists, undermining the plans’ ability to control drug costs … which in turn would lead to higher insurance premiums, or changes in coverage such as increased deductibles or higher co-pays," testified Richard Feinstein, director of the bureau of competition for the FTC. "Although the commission is sympathetic to the difficulties community pharmacies face, the proposed [antitrust] exemption threatens to raise prices to consumers for much-needed medicine, which would have an especially dire impact on seniors," Feinstein said. "It also threatens to increase the cost to employers who provide healthcare insurance to employees and retirees, which may cause those employers to reduce or eliminate benefits. And there is no assurance that the proposed exemption would produce any offsetting higher quality care."
The testimony may prove controversial if the FTC approves the merger between Express Scripts and Medco as early as next week, as many news reports have speculated will happen.
Critics of that merger suggested the PBM created by an Express Scripts/Medco merger would similarly lead to higher insurance premiums and changes in coverage, such as increased deductibles or higher co-pays, threatening to raise prices to consumers for much-needed medicine that would have an especially dire impact on seniors without any assurance that the proposed merger would produce any offsetting higher quality care.
"There are few mergers I’ve ever seen that are as anticompetitive as this meger," David Balto, antitrust attorney and former FTC policy director told reporters Wednesday afternoon during a press conference convened by the Preserve Community Pharmacy Access NOW! coalition — a coalition of pharmacy interests specifically formed in opposition of the proposed Express Scripts/Medco merger. Balto pointed out that as many as 78 Congress members have written the FTC advocating that this merger be disallowed precisely because of its anticompetitive potential. The coalition convened the press conference to call on all state attorneys general to file suit against the ESI/Medco merger should that be approved by the FTC.
Express Scripts early Wednesday filed a Form 8-K with the Securities Exchange Commission that they expect the proposed merger to close as early as next week, suggesting that an FTC decision may be imminent.
According to published reports, attorneys general in New York, Pennsylvania, Ohio, Texas and California already are considering filing suit to block the merger if it is passed without serious conditions.
It is amazing that pharmacies/drugstores only just think that this would have them over a barrel. The situation has been present all along and steadily getting worse but the Corporate owners were too busy counting the money they were making to see the slide in services pharmacists would be able to provide under the payment scheme. Walgreens need to be recognized for their stance on refusing to accept reduced payments (for providing more services) for Express Scipts members. All chains should let the merger occur and then refuse to accept their contract - all members of the merged beast would have to voice their concerns and pay normal and customary prices (let's all abandon $4 generics!). Should the Tail be wagging the dog or should the Dog be wagging the tail?