A Senate subcommittee heard testimony this week on the largest pharmacy benefit management (PBM) merger in history.
The Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing to investigate the proposed merger between Express Scripts Inc. and Medco Health Solutions, two of the "big three" PBMs that, combined, could manage up to two-thirds of all prescriptions filled.
The Federal Trade Commission is investigating to determine whether the merger would violate antitrust law. The subcommitee hopes the hearing will shed light on who's really coming out ahead on the deal.
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According to a press statement issued by a coalition – Preserve Community Pharmacy Access NOW! – there is "rapidly growing, widespread concern among elected officials including attorneys general in dozens of states, pharmacy service providers, consumer advocates, patient advocates, Members of Congress and others that an approved merger would give the consolidated, mega-PBM unfettered market power and would actually increase costs for consumers, while decreasing the quality of care."
When Express Scripts' announced its $29 billion acquisition of Medco Health Solutions in July, community pharmacists began to rally against the move, which they say would harm patients by reducing choice, decreasing access to pharmacy services and ultimately leading to higher prescription drug costs paid by plan sponsors and consumers.
The combination of two companies that manage prescription drug benefits for more than 115 milion people and handle one in every three prescriptions would result in creating a "mega PBM," says the National Community Pharmacists Association. The giant entity would control more than 40 percent of the national prescription drug volume.
Months after the merger was announced, a coalition of consumers, businesses and community-based pharmacists banded together to protest the deal. Opponents say the combined PBM would limit drug management choices for health plans, reduce transparency, and push patients to favor in-house mail operations over their local pharmacy.
The merger also would create an entity with more than a 50 percent share of all specialty pharmaceutical sales, giving it the incentive and ability to reduce competition and prevent new competition in specialty pharmacy.
But Medco and Express Scripts executives say the merger will cut wasteful spending, lower the cost of medicine, close gaps in care and protect consumers.
"We will lower drug costs that are far too high and improve health outcomes for consumers," said George Paz, chairman and president for Express Scripts in his testimony. "As the big drug companies merge, as large chain drug stores buy up their competition and demand higher prices, we must become more effective representing the interests of plan sponsors and consumers. Patients — not profits — must come first."
"As health care spending continues on an unsustainable trajectory, pharmacy benefit managers have reduced drug costs by 30 percent or more each year through innovative technology and products. These savings are passed on to plan sponsors and consumers."
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