Emphasize Merger's Anticompetitive Consequences & Potential Harm to Consumers
Alexandria, Va. - August 4, 2011
Today, the National Association of Chain Drug Stores (NACDS) and National Community Pharmacists Association (NCPA)—who represent a near totality of the nation's pharmacy community—sent their first formal letter to the U.S. Federal Trade Commission (FTC) in shared opposition to the proposed merger of Express Scripts, Inc. and Medco Health Solutions, Inc.
The initial correspondence emphasized joint opposition to the proposed merger on the ground of the merger's anticompetitive impact on patients, consumers, the market and the entire healthcare delivery system. In the letter, NACDS and NCPA offered to assist the FTC in its assessment, examination and investigation into the merger's anticompetitive nature and its consequences on patient access and consumer care.
The joint NACDS/NCPA letter can be read here:
Dear Chairman Leibowitz:
The National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA) write to express our opposition to the proposed merger of Express Scripts and Medco. The merger would result in a consolidated pharmacy benefit manager (PBM) with excessive market power that will have anticompetitive effects on patients and the healthcare delivery system. We respectfully request that the Commission carefully examine this proposed merger and hereby offer our assistance to the Commissioners and staff.
NACDS members consist of traditional drug stores, supermarkets, and mass merchants with pharmacies—from regional chains with four stores to national companies. NACDS members operate 39,000 pharmacies, and employ more than 2.7 million employees, including 118,000 full-time pharmacists. NCPA members include the small business owners of more than 23,000 pharmacies that employ more than 315,000 employees including 62,400 full time pharmacists. The members of both groups contract with PBMs, as a part of health plans, to provide patient care.
Together, NACDS and NCPA represent almost all of the nation's community retail pharmacies. As community pharmacies whose primary concern is patient well-being, we are concerned about the threat posed by the planned merger to patient care and pharmacy access.
Our opposition stems from the fact that the merger would result in a substantial reduction of competition in already highly-concentrated markets, including those involving PBM services, as well as mail order distribution services and specialty pharmaceutical services. This combination will control a large share of the supply line for brand and generic prescription drugs, and thereby will have the ability to raise prices to plans and patients, and limit access to pharmacy patient care. This will create harm not only to pharmacies, but also to consumers. To support our position, we are preparing data that will assist the Commission in its assessment of the merger's anticompetitive impact.
We are confident the Commission will conduct a thorough analysis addressing our concerns and those of others in the marketplace. We hope the Commission will ensure it has sufficient data and information from both Express Scripts and Medco, and other stakeholders, to make an informed decision that protects competition and patient care. We are available to assist the Commission in its assessment in any way possible. To that end, we look forward to meeting with Commission staff to share additional information and analysis in the coming days. Should you have any questions, please contact us.
The National Association of Chain Drug Stores (NACDS) represents traditional drug stores, supermarkets, and mass merchants with pharmacies—from regional chains with four stores to national companies. Chains operate 39,000 pharmacies, and employ more than 2.7 million employees, including 118,000 full-time pharmacists. They fill nearly 2.6 billion prescriptions annually, which is more than 72 percent of annual prescriptions in the United States. The total economic impact of all retail stores with pharmacies transcends their $830 billion in annual sales. Every $1 spent in these stores creates a ripple effect of $1.96 in other industries, for a total economic impact of $1.57 trillion, equal to 11 percent of GDP. NACDS represents 137 chains that operate these pharmacies in neighborhoods across America, and NACDS members also include more than 900 pharmacy and consumer packaged goods suppliers and service providers, and over 60 international members from 23 countries. For more information about NACDS, visit www.NACDS.org.
The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.
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