Thompson to Federal Trade Commission: Proposed Pharmacy Management Merger Would Negatively Impact Rural Communities

Mar 30, 2012 Issues: Healthcare

Washington, D.C. – U.S. Representative Glenn 'GT' Thompson this week in a letter to the Federal Trade Commission (FTC) raised concern about the proposed merger between Express Scripts, Inc. (ESI) and Medco Health Solutions, two pharmacy benefit management (PBM) companies.  The letter requests that the FTC carefully consider the negative impact the merger will have on local pharmacies and consumer access to prescription drugs.

"The planned merger of Express Scripts, Inc. and Medco Health Solutions, currently under review by the Federal Trade Commission (FTC), has the very real potential to harm residents of rural areas, including much of the Commonwealth of Pennsylvania," the letter states.  “The merger of these pharmacy benefit managers will result in a market concentration powerful enough to significantly increase prescription drug prices for families. Given all that is at stake for families and rural communities, I respectfully request that you weigh the serious implications this merger has for the health and well being of our communities.”

Local pharmacies and drug stores across the Fifth Congressional District have praised Representative Thompson's letter to the FTC:

“This merger will provide these larger companies with even more power and leverage causing additional drug price increases as consumer access and choice decrease,” said Nickolas Kernich, owner and manager of Punxsy Hometown Pharmacy, Punxsutawney, Pa. “More patients will lose the ability to choose their local pharmacist, as more prescription services are forced into out of state mail order pharmacies, eliminating cash flow that local pharmacies move through communities.”

“Klingensmith’s Drug Stores continue to be denied the fair opportunity to compete and serve the community as a result of the actions of pharmacy benefit managers,” said David Cippel of Klingensmith's Drug Store, which has store locations in New Bethlehem and Rimersburg, Pa.  “Patients are losing the ability to choose the pharmacist they trust and access to the drugs they need at fair prices.  This merger will negatively impact residents in both New Bethlehem and Rimersburg, and I thank Congressman Thompson for offering a strong voice of opposition with the Federal Trade Commission.”

"In our business area, we have had four small independent pharmacies close their doors in the past year. In one situation the community now has no pharmacy. This is directly attributable to the actions of the pharmacy benefit managers,” said David Smith, owner of Means and Lauf Pharmacy in Brookville, Pa. “Hometown pharmacies are willing to compete, but are often denied the opportunity. Patients are losing the ability to choose the pharmacist they trust to fill their family's prescriptions.”

Last July, Express Scripts and Medco announced a $29 billion merger agreement that could take effect as soon as early 2012.  FTC approval of the merger would combine two of the nation's three largest PBMs, giving the consolidated mega-PBM the unfettered ability to increase prices and reduce access to pharmacy services.  

The Express Scripts, Inc. / Medco Health Solutions merger has been investigated by the House Judiciary Subcommittee on Intellectual Property, Competition and the Internet and the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.  

Thompson joins a growing number of elected officials as well as pharmacy service providers, consumer advocates, patient advocates, employers and others who have contacted the FTC to express concern about the impact of an approved merger. In the coming weeks, the FTC will determine whether or not the deal will move forward.

To view the full text of the letter, click here.