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    House hearings open Express Scripts-Medco merger battle

    The debate over the proposed merger between Express Scripts Inc. (ESI) and Medco has hit the House of Representatives. The House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet is scheduled to open hearings today on the potential impact of the acquisition of Medco by ESI.

    “The pharmacy benefits management industry is already controlled by a very small number of businesses with Medco, ESI, and Caremark currently controlling a vast majority of the market,” said California Pharmacists Association CEO Jon Roth, CAE, in a letter to the subcommittee. “The proposed acquisition would dangerously concentrate power into 1 company, further reduce competition in an already concentrated market, and negatively impact the purchasers of healthcare, patients, pharmacists, and community pharmacies.”

    CPhA also urged members who live in districts of the 6 subcommittee members from California to talk to their representatives and staffs before the hearing.

    What impact the hearings might have on the Federal Trade Commission’s consideration of the proposed merger is unclear. Politics has emerged as a potential stumbling block to the merger, noted Leerink Swann Equity Research analyst David Larsen. FTC may use this proposed merger to help calm lingering concerns over the CVS Caremark merger.

    FTC Commissioner Julie Brill may also play a role. She was a key player in the PBM transparency law that passed in Vermont and also played important roles in several multistate enforcement actions that led to payments of hundreds of millions of dollars in settlements paid by PBMs. FTC has already asked both ESI and Medco for additional information on the proposed merger.

    Such requests for additional information typically signal doubts by FTC staff about the anticompetitive impact of a proposed merger, said David Balto, former policy director for the FTC’s Bureau of Competition and now general counsel for the Independent Specialty Pharmacy Coalition.

    See the cover article in the September issue of Drug Topics (www.drugtopics.com/esimedco) for further consideration of the issues and potential consequences of the proposed merger.

    Fred Gebhart, Contributing Editor
    Contributing Editor Fred Gebhart works all over the world as a freelance writer and editor, but his home base is in San Francisco.