Express Scripts-medco deal endangers community pharmacists
Express Scripts-medco deal would doom community pharmacists
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.