Opposition to drug benefit merger heats up

By Julian Pecquet - 10/24/11 03:02 PM ET

Fourteen House members recently sent a bipartisan letter to the Federal Trade Commission objecting to a proposed merger of drug plan administrators, bringing the total of publicly concerned lawmakers to 20 and counting.

The letter, spearheaded by Congressional Community Pharmacy Caucus Co-Chairwoman Cathy McMorris Rodgers (R-Wash.), calls for a "full and thorough investigation" into the proposed merger between pharmacy benefit managers Express Scripts and Medco Health Solutions — including "the impact that the merger will have on consumers, patients, third party and federal payers."

Separately, the office of Senate Judiciary Antitrust subcommittee Chairman Herb Kohl (D-Wis.) told Bloomberg the senator plans a hearing on the merger next month; the House Judiciary Committee held a hearing last month.

PBMs are third-party administrators of prescription drug programs who act to keep costs low by negotiating low drug prices and getting people on generic versions. Critics of the proposed merger between two of the nation's largest PBMs say it would create a behemoth that would control more than half of specialty pharmaceutical sales for cancer and other complex diseases and close to 60 percent of the mail-order market.

"On its face," the letter states, "the merger demonstrates the potential for a combined entity to dominate an already heavily concentrated market."

Proponents say patients and taxpayers stand to gain as pharmacy benefit managers force pharmacies and other drug distributors to become more efficient.

The decision lies with the FTC, but lawmakers can bring up politically weighty concerns.

Faced with push-back from lawmakers with powerful pharmacy interests in their districts, Express Scripts has recently hired The Mathis Group and former top House Judiciary staffer Joseph Gibson to lobby on behalf of the merger.

The letter is signed by Reps. Robert Aderholt (R-Ala.), Spencer Bachus (R-Ala.), Jo Bonner (R-Ala.), Mo Brooks (R-Ala.), Judy Chu (D-Calif.), Maurice Hinchey (D-N.Y.), Rubén Hinojosa (D-Texas), Tom Marino (R-Pa.), McMorris Rodgers, Mike Rogers (R-Ala.), Martha Roby (R-Ala.), Terri Sewell (D-Ala.), Peter Welch (D-Vt.) and Don Young (R-Alaska). It follows similar letters from Sen. Tom Harkin (D-Iowa) and Reps. Henry Waxman (D-Calif.), Frank Pallone (D-N.J.), Diana DeGette (D-Col.), Jan Schakowsky (D-Ill.) and Joe Courtney (D-Conn.).