Express Scripts-Medco Merger

Urge Your Federal, State Legislators to Oppose the Express Scripts-Medco Merger

The proposed mega-merger of pharmacy benefit managers (PBMs) Express Scripts, Inc. and Medco Health Solutions 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 proposed merger of Express Scripts and Medco is a tipping point in terms of PBM market concentration. The merger will cause a substantial reduction in both price and non-price competition among PBMs, especially in certain defined customer segments. If approved, the merger will create a "mega PBM" that controls over 40% of the national prescription drug volume.
• Large national employers, unions, government-sponsored health plans are already largely limited in their PBM choices. The merged entity will be able to dictate benefit structures and shift patients to favor their in-house mail operations—depriving consumers access to their local pharmacy, which provides vital healthcare services.
• The merger would create an entity with more than a 50% share of all specialty pharmaceutical sales, giving it the incentive and ability to reduce competition and prevent new competition in specialty pharmacy.
• The merger will create the largest mail-order pharmacy accounting for close to 60% of all mail-order scripts processed in the U.S. The merged firm will have an increased incentive to force consumers to utilize their mail order business. But mail order businesses consistently dispense more costly brand-name drugs and fewer generics than retail pharmacies; therefore, ultimately raising drug costs.
• The combined Express Scripts-Medco will have an increased incentive to reduce transparency—an important concern of consumers, employers and pharmacies. Absent effective competition there is no guarantee that any hypothetical savings claimed by Express Scripts and Medco would be passed along to consumers or plan sponsors.
• At the same time, independent community pharmacies have no leverage with which to negotiate contracts with PBMs to support a level playing field and the patient's right to choose a pharmacy. By creating a PBM with unprecedented market power, the merged entity would be able to limit consumer choice and pharmacy access, simply to line the pockets of Express Scripts-Medco's shareholders.

Dec. 6, 2011 U.S. Senate Judiciary Subcommittee on Antitrust, Competition and Consumer Rights

• Marshland (WI) Pharmacy Owner Speaks to Congress
• NCPA Warns of Dangers of Express Scripts-Medco Merger at U.S. Senate Hearing

September 20, 2011 Hearing on the Proposed Merger Between Express Scripts and Medco

• Waste Not, Want Not - Examples of Mail Order Pharmacy Waste PDF (3M)
• Testimony of Joseph Lech at the United States House of Representatives Committee on the Judiciary Subcommittee on Intellectual Property, Competition,and the Internet Hearing on the Proposed Merger Between Express Scripts and Medco PDF (118k)

Resources

• PBM Myths and Urban Legends: Top Ten Erroneous Statements Made by Express Scripts and Medco CEOs During December 6, 2011 Congressional Hearing PDF (496k)
• Bag Stuffers to Encourage Patients to Contact the FTC in Opposition to the Express Scripts and Medco Merger (Courtesy of NACDS) PDF (321k)
• Express Scripts-Medco Merger Issue Brief
• Sample Letter to FTC

Members of Congress Questioning the Merger

• Breakdown of Members of Congress in Senate and House Who Have Written Letters to the FTC Voicing Concern over the Proposed ESI-Medco Merger PDF (120k)
• Collection of Letters of Concern from Various Federal and State Representatives and Organizations Regarding the Merger PDF (6M)

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Releases and Letters to the Editor

• As House Panel Examines Health Industry Consolidation, NCPA Urges Congress to Oppose Express Scripts-Medco Merger
• St. Louis Today - Wrong Prescription for Lowering Costs
• Specialty Drug Cost Problem to Grow Worse under New Pharma-Merger
• NACDS and NCPA Express Formal Opposition to the Express Scripts, Inc. and Medco Health Solution, Inc. Merger in Letter to the U.S. Federal Trade Commission
• NCPA, NACDS Issue Joint Statement to Oppose Express Scripts, Medco Deal: "Too Big To Play Fair"
• Pharmacists: Proposed Express Scripts-Medco Merger Would Reduce Competition and Raise Health Care Costs

California Legal Problems Highlight the Dangers of Limited PBM Competition in the Large Health Plan Market

Approval of the merger would effectively reduce the number of PBM companies serving the largest health plans to just two players: Express Scripts-Medco and CVS Caremark. These two entities would control the prescription drug plans of 42 of the top Fortune 50 U.S. corporations and all of the top 10.

In selecting a PBM recently, the California Public Employees' Retirement System, or CalPERS, which is the largest purchaser of healthcare services after the federal government, was reduced to choosing between one company (CVS Caremark) that was being sued for previously defrauding CalPERS and its incumbent PBM, Medco, which was accused of paying about $4 million in bribes to win the CalPERS contract.

"The allegations against Medco and Caremark 'point to the larger issue of how dysfunctional our healthcare system is that the two top bidders are engaged in alleged acts of bribery and fraud,' - Kathay Feng, executive director of California Common Cause." – Los Angeles Times article, Apr. 16, 2011