Pharmacy merger criticized
February 15. 2013 11:32AM
WASHINGTON – A Tunkhannock pharmacy owner told a U.S. House panel the merger of two giant pharmacy benefit managers could force community stores like his out of business and result in higher prescription drug costs for consumers.
Joe Lech, who owns five independent pharmacies in Northeastern Pennsylvania, told House members Tuesday a planned $29.1 billion merger between Express Scripts and Medco Health Solutions would result in a “mega” company in control of more than 40 percent of all prescription drug orders nationally.
Also testifying Tuesday before the House Judiciary Committee’s subcommittee on intellectual property, competition and the Internet, were the top executives from the two companies that wish to merge.
They say the deal will result in cheaper prescription drugs because the combined company will be able to squeeze discounts from pharmaceutical companies because it will purchase drugs – which it does on behalf of employer drug benefit plans – at such a large volume.
The previous largest pharmacy benefits company sprung from a $21.7 billion merger in 2007 between CVS and Caremark.
George Paz, chairman and CEO of Express Scripts, told the lawmakers that pharmacy benefit managers “are successful when our clients save money through lower employer and employee health premiums and/or reduced out-of-pocket costs while at the same time enhancing safety and more positive medical outcomes.”
Paz said a “combined Express Scripts and Medco will be well-positioned to protect American families from the rising cost of prescription medicines.” Paz maintained the marketplace would remain highly competitive post-merger and noted that it will be up to the Federal Trade Commission to review the competitive effects of the merger.
But Lech and other independent pharmacists – the National Community Pharmacists Association is a major opponent of the merger – say the merger is not in the best interests of consumers. Lech, a member of the national association, operates five pharmacies in Tunkhannock, Laceyville, Nicholson, Dushore and Canton.
During the recent flooding, Lech said, it took him two hours one morning to make it to one of his stores – a normal half hour drive – and he arrived to find a man who had been evacuated standing outside, in need of filling the 16 medications he took daily.
“Thankfully, I was able to refill his medications. But what would happen in cases such as this if pharmacies like mine disappeared from the communities that rely on them? Unfortunately, pharmacy closings are happening on a regular basis,” he said.
“I am very concerned that this merger could reduce patient access while ultimately leading to higher drugs costs due to the reduction in competition.”
Marino weighs in
Also concerned about the proposed merger is Rep. Tom Marino, R-Lycoming Township, a member of the judiciary committee. Lech’s stores are in Wyoming County.
Marino is the author of a bill, the Preserving Our Hometown Independent Pharmacies Act, that seeks to allow independent pharmacies to band together to form negotiating pools in order to themselves negotiate with large pharmacy benefit managers.
“At a time when I am fighting to give our independent community pharmacies the tools to better compete against large corporations, this merger raises a number of serious questions and concerns,” Marino said in a statement. “Hometown pharmacies are already at a substantial disadvantage when it comes to negotiating with the PBMs.”
Other lawmakers also have expressed concerns about the merger.