FMI Asks FTC to Block Big PBM Merger

ARLINGTON, Va. — Food Marketing Institute, following its Feb. 2 letter to Federal Trade Commission Chairman Jon Leibowitz, issued the following statement Monday on behalf of its regulatory counsel, Erik Lieberman, regarding the proposed acquisition of Medco Health Solutions (Medco) by Express Scripts, Inc.

“The supermarket industry ranks among the most competitive in our economy. Consumers and pharmacy patients have benefited from this robust competition in the form of low prices and high levels of service.

“Our members dispense over 30% of our nation’s drugs and play a vital role by offering the lowest cost drug options to millions of consumers.

“The ESI-Medco merger will destroy competition by creating a behemoth with the power to unilaterally slash reimbursement rates to uncompetitive levels. A merger of these two giants would lead to the demise of the reduced price and free generic drug programs that millions of Americans depend on, and reduce access to other key pharmacy services.  The FTC should bring an enforcement action to enjoin the merger.”

FMI said in its letter [http://fmi.org/newsletters/uploads/CommentsFiled/fmi.FTC_020212.pdf ] to the FTC that "seven of the largest supermarket chains" had met with FTC officials to ask that the deal be stopped but did not identify the chains.

If they are squeezed financially, grocery store pharmacies will be forced to cut back hours, end discounts for generics and stopping giving free antibiotics and other promotions, said the letter, which was signed by FMI Vice President Cathy Polley and regulatory counsel Erik Lieberman.

"The merger will allow the dominant PBM to control approximately 40% of the overall prescription drug volume in the United States," said the FMI letter.

The FMI argued, in addition, that the PBMs would not likely pass along to consumers any cost savings they would achieve by squeezing supermarket pharmacies.

Small, independent pharmacies, under pressure from big chains, have also complained about the deal, saying that their reimbursement rates from the big PBMs were being reduced to the point that some felt they might not be able to stay in business.