2 of 3 largest PBMs combine

The union of Express Scripts and Medco has some doctors concerned about diminished choice.

By Emily Berry — Posted April 16, 2012

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

A massive merger between two pharmacy benefit managers that some physicians formally opposed is a done deal, following the go-ahead from the Federal Trade Commission on April 2.

St. Louis-based Express Scripts will pay $29.1 billion for Medco Health Solutions, based in Franklin Lakes, N.J. The merged company will handle pharmacy benefits for about 155 million people and hold an estimated 40% of the PBM market.

The FTC ended its eight-month investigation into the deal on April 2, allowing the acquisition to move forward.

“This was not an easy decision,” said a statement released by commissioners who approved the acquisition. “We & recognized that the merger could be viewed as presumptively anticompetitive because the PBM industry is concentrated and the market share of the merged entity would be more than 40%, even using the broadest market definition.”

Part of commissioners’ rationale for accepting the deal was that the combined company would face adequate competition from other companies, including the second-largest PBM, CVS Caremark, and health plans’ PBM subsidiaries. Dissenting FTC Commissioner Julie Brill issued her own statement, saying the FTC should look at the PBM market in three years to determine whether the merger has hurt industry competition.

After the FTC announcement, Express Scripts immediately took over Medco’s business, including its website, and issued a statement promising that the new company would improve health care.

Opponents remained convinced of the potential for the new company to harm the health care system.

As the new, larger Express Scripts takes its place at the top of the PBM market, some physicians expect to see diminished competition for specialty pharmacy services. Specialty pharmacies manage complex, often costly benefits for medically fragile patients.

In a Jan. 23 letter to the FTC, dozens of physicians from multiple specialties in five states appealed to the agency to reject Express Scripts’ bid to buy Medco because, they said, the consolidation of the two companies’ specialty pharmacies was likely to lower the level of customer service for patients who are most in need of guidance regarding their prescription medicine.

Louis LaLuna, MD, president of the Pennsylvania Society of Gastroenterology, was among those who signed the letter. Dr. LaLuna, who practices outside Reading, Pa., said good service is more than just a nicety for patients on specialty drugs. For patients with hepatitis C, for example, missing only a few doses could make the drugs ineffective and result in a treatment setback, he said.

“The quality of service we get from some of these pharmacies is very high because of the competitive nature of the market,” Dr. LaLuna said. He said he’s concerned about what will happen “when you don’t have people there to hold the hand of these very delicate patients. & When they have problems, do they have someone they can call?”

FTC commissioners concluded in the majority report that because the specialty pharmacy business is less concentrated than the general PBM market, the merger would not threaten competition.

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn