FTC requests additional information on ESI-Medco merger
NEW YORK — The proposed merger between pharmacy benefit managers Express Scripts and Medco Health Solutions hit a speed bump Friday as the Federal Trade Commission requested additional information, indicating that the deal has raised antitrust concerns among regulators.
According to the filing, the waiting period for the merger legally required under the Hart-Scott-Rodino Antitrust Improvements Act was scheduled to expire Friday, but the FTC's request, officially called a "second request," extends the waiting period by 30 days after ESI and Medco have fulfilled it.
Both companies still expect the $29.1 billion deal, announced in July, to go through in the first half of 2012.
"That was an expected part of the review process," an ESI spokesman told Drug Store News. "We are looking forward to working with the FTC, as we have been, and even though the timeline for the antitrust review is not fixed, we're confident of a positive review."
The FTC's move drew applause from pharmacy groups that had opposed the merger.
"This is an important step in the careful consideration of a proposed merger that would have anticompetitive effects on patients, consumers, the market and the entire healthcare delivery system," a joint statement by National Association of Chain Drug Stores president and CEO Steven Anderson and National Community Pharmacists Association EVP and CEO Douglas Hoey read. "As we indicated to the FTC in our formal letter, NACDS and NCPA are concerned that the merger would result in a consolidated PBM with excessive market power, ultimately to the detriment of consumers."
The Independent Specialty Pharmacy Coalition echoed the the NACDS's and NCPA's sentiments.
"The ISPC commends the commission on issuing a second request in the review of a merger that would combine two of the three largest pharmacy benefit managers and the two largest specialty pharmacy companies," ISPC executive director Russell Gay said. "We are glad to see the FTC will be taking a detailed look at how further consolidation of the PBM and specialty markets may negate efforts to contain healthcare costs."