In advance of today's scheduled Senate subcommittee hearing on the proposed $29.1 billion merger of pharmacy benefit management companies Express Scripts and Medco, three Republican senators have sent a letter to the Federal Trade Commission urging them to pay special attention to the dominant position the merged company would have in the mail order pharmacy market.
Senators Saxby Chambliss (R-Ga.), Johnny Isakson (R-Ga.) and Jerry Moran (R-Kan.), urged a "thorough and complete investigation" of the proposed union, in a letter to FTC Chairman Jon Leibowitz, and asked the FTC to "take into account what impact this proposed merger could have on consumers and patients, on taxpayers, on the government, and on pharmacies."
The senators are the latest to join a growing list of legislators on Capitol Hill who oppose the merger as well as a range of public and private sector businesses and organizations including the American Antitrust Institute (AAI), the Small Business Majority and the National Community Pharmacists Association. In all, 27 members of Congress have publicly expressed their concerns over the proposed merger.
"The merger will likely cause anticompetitive harm in the provision of PBM services to the large plan sponsors market segment," noted a letter from AAI to the FTC. "Because of the large PBMs' vertical integration and enhanced buyer power, the merger will also likely cause anticompetitive harm in the specialty pharmacy and mail order pharmacy market segments."
Meanwhile, Express Scripts and Medco released the results of a study from Compass Lexecon sponsored by the two companies that shows the companies save employers, the federal government, labor unions, and consumers between $51 billion and $87 billion annually on the cost of prescription medications.
"Pharmacy benefit managers (PBMs) save consumers billions of dollars, but most people do not know very much about the role such firms play in the healthcare system," said Jonathan Orszag, an economist with Compass Lexecon and co-author of the report, in a press release announcing the results. "We hope this study shows the economic benefits created by PBMs today, the role that PBMs should play in constraining rising healthcare costs in the future and the role the merger of Express Scripts and Medco can play in accelerating those savings."
The companies tout a wide range of benefits for consumers if the merger is allowed to proceed, including improved prescription management for patients and better care coordination for patients with chronic or complex medical conditions.
"With the cost of medications continually on the rise, our role as an advocate for patients has never been more necessary," said George Paz, chairman, president and CEO of Express Scripts in a statement. "Bringing our companies together will enable us to bring forward innovative solutions to improve the quality of patient care and lower costs."
But the senators are not so sure. They are concerned that post-merger, the company would control as much as 60 percent of the mail-order pharmacy market and could significantly limit consumer choice and eventually lead to higher drug prices.