Ex­press Scripts-medco deal en­dan­gers com­mu­nity phar­ma­cists

Ex­press Scripts-medco deal would doom com­mu­nity phar­ma­cists

Modern Healthcare - - MODERN HEALTHCARE - Eva Clay­ton and Dennis Archer

The Se­nate Ju­di­ciary Com­mit­tee’s An­titrust, Com­pe­ti­tion Pol­icy and Consumer Rights Sub­com­mit­tee re­cently an­nounced that it will con­vene a hear­ing to in­ves­ti­gate the pro­posed merger be­tween Ex­press Scripts and Medco Health So­lu­tions, two of the na­tion’s largest phar­macy ben­e­fit man­age­ment com­pa­nies. The hear­ing adds scrutiny of a plan that is al­ready be­ing re­viewed by a sub­com­mit­tee of the House Ju­di­ciary Com­mit­tee and the Fed­eral Trade Com­mis­sion.

With ac­cess and af­ford­abil­ity of health­care on the line for tens of mil­lions of Amer­i­cans, this process is es­sen­tial, and the im­pact of an ap­proved deal on Amer­i­can pa­tients needs to be at the fore­front of any dis­cus­sions.

PBMS are the largely un­reg­u­lated drug mid­dle­men that man­age pre­scrip­tion drug ben­e­fit pro­grams for em­ploy­ers, unions, health plans and oth­ers. They were cre­ated to help con­trol the cost of drug cov­er­age, but as PBMS have grown in size and power, the busi­ness model has gone from one aimed at help­ing pa­tients re­al­ize cost sav­ings to one aimed at in­creas­ing their own bot­tom lines.

To max­i­mize rev­enue, PBMS sup­port a sys­tem that charges in­creased costs for lesser care. This type of sit­u­a­tion should raise con­cerns at any time, but es­pe­cially now, as Amer­i­can busi­nesses and con­sumers are still reel­ing from the re­cent eco­nomic down­turn.

An ap­proved merger be­tween Ex­press Scripts, the No. 3 PBM in the coun­try, and Medco, the largest, would make a bad sit­u­a­tion even worse. Com­bin­ing these in­dus­try giants would cre­ate a con­sol­i­dated com­pany with ex­ces­sive con­trol over the health­care of tens of mil­lions of Amer­i­cans. The merged mega-pbm would con­trol much of the sup­ply line of brand­name and generic drugs, es­pe­cially in mar­kets where the PBMS are al­ready highly con­cen­trated. This would lead to even higher costs for pre­scrip­tion med­i­ca­tions that would need to be ab­sorbed by em­ployer health­care plans and pa­tients. It could also cre­ate a dan­ger­ous prece­dent for health­care and phar­macy ac­cess.

For ex­am­ple, this con­sol­i­dated gi­ant PBM would own the largest mail-or­der drug com­pany and would be mo­ti­vated to steer cus­tomers away from their lo­cal, com­mu­nity phar­macy and into the gi­ant mail-or­der firm it would own. Ex­press Scripts and Medco will ar­gue that this saves con­sumers and plan spon­sors money when, in fact, their mo­tiva-

It is com­mu­nity phar­ma­cies, not mail-or­der pro­grams, that save pa­tients and pur­chasers money.

tion is to cre­ate higher prof­its.

What this means is that im­por­tant health­care de­ci­sions are taken out of the hands of the trusted health­care providers and their pa­tients and are in­stead put into the hands of a PBM. Costs mat­ter to pa­tients, so it is im­por­tant to make sure they have ac­cess to the right drug at an af­ford­able price, some­thing that will help en­sure that pa­tients are able to fol­low their doc­tors’ or­ders and that the pre­scribed course of ac­tion is suc­cess­ful. How­ever, PBMS re­ceive re­bates or other in­cen­tives from drug man­u­fac­tur­ers for plac­ing drugs on their for­mu­la­ries, and this is likely a rea­son that PBMS dis­pense generic drugs only 56% of the time ver­sus 71% for com­mu­nity phar­ma­cists.

Pa­tients over­whelm­ingly pre­fer fill­ing their pre­scrip­tions at a lo­cal phar­macy, and it is com­mu­nity phar­ma­cies, not mail-or­der pro­grams, that save pa­tients and pur­chasers money. Re­gard­less of this, the larger, con­sol­i­dated new PBM would have even greater con­trol and au­thor­ity to set drug prices for their com­mu­nity phar­macy com­peti­tors and their own mail-or­der op­er­a­tions, and would most cer­tainly use this unique ad­van­tage to steer cus­tomers to­ward mail or­der un­til, even­tu­ally, they have no other choice.

Such a move would neg­a­tively im­pact all Amer­i­cans, but would hit our un­der­served com­mu­ni­ties es­pe­cially hard. We’re talk­ing about lower-in­come, mi­nor­ity, ru­ral and older com­mu­ni­ties who rely on their lo­cal phar­macy for every­thing from ad­min­is­ter­ing flu shots to pro­vid­ing ad­vice and coun­sel—at con­ve­nient and flex­i­ble hours and for af­ford­able prices. Lo­cal phar­ma­cists are a crit­i­cal part of the U.S. health­care sys­tem. Phas­ing them out is not in the best in­ter­est of pa­tients or the com­mu­ni­ties they serve.

But this is what would hap­pen with an ap­proved merger. A con­sol­i­dated PBM would be fi­nan­cially mo­ti­vated to cut this im­por­tant health­care provider out of the sys­tem, a harm­ful course of ac­tion that would ul­ti­mately re­sult in the loss of crit­i­cal jobs. Ac­cord­ing to the Bureau of La­bor Sta­tis­tics, phar­ma­cies em­ployed more than 380,000 tech­ni­cians and aides in 2008, and that num­ber is pro­jected to in­crease to nearly half a mil­lion by 2018, rep­re­sent­ing a 25% in­crease. We can­not af­ford to let these jobs be­come ca­su­al­ties of a mis­guided busi­ness ven­ture.

Times are tough, in­deed. But even in good times, a merger that would place an un­due bur­den on Amer­i­can pa­tients should be thor­oughly scru­ti­nized. And that is hap­pen­ing with Ex­press Scripts/medco.

Amer­i­cans can­not af­ford to have their health­care costs and ac­cess to phar­macy ser­vices dic­tated by a mega-pbm that that would be mo­ti­vated to put prof­its be­fore the well in­tended PBM pro­gram and peo­ple. And lo­cal phar­ma­cists need to re­main as key health­care providers. There­fore, this merger should be op­posed.

Dennis Archer is the former mayor of Detroit and the chief le­gal ad­viser for the coali­tion.

Eva Clay­ton is a former con­gress­woman from North Carolina and chair of the Pre­serve Com­mu­nity Phar­macy Ac­cess Now coali­tion, which in­cludes com­mu­nity phar­ma­cists and consumer and pa­tient ad­vo­cacy groups.

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