NACDS, NCPA and Pharmacies File Lawsuit to Stop Proposed Merger of Express Scripts and Medco to Protect Patient Access to Community Pharmacy



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Legal Action Part of "All-Levels, All Branches of Government" Efforts
by Community Pharmacy to Prevent Proposed Mega Merger

Alexandria, Va. - March 29, 2012

In continuing efforts to protect patient care and community pharmacy access, the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA), and nine retail pharmacy companies today filed a lawsuit against the proposed mega merger of pharmacy benefit manager (PBM) companies Express Scripts Inc. and Medco Health Solutions Inc. The lawsuit was filed in the U.S. District Court for the Western District of Pennsylvania.

Joining NACDS and NCPA as plaintiffs in the lawsuit are nine community pharmacy companies that are headquartered in or have a presence in Pennsylvania. Active participation by community pharmacies—both chains and independents—that serve patients every day further illustrates the anti-consumer, anti-competitive impact of the proposed merger. The following companies are plaintiffs on the complaint: Brighton Pharmacy; Klingensmith Drug Inc.; Kopp Drug, Inc.; Lech's Pharmacy Group; Means Lauf Super Drug; Hometown Pharmacies; Skippack Pharmacy; Thompson Pharmacy; and Value Drug Company/Value Specialty Pharmacy.

"A merger of Express Scripts and Medco would have dire consequences for patients and the retail community pharmacies that serve them. We continue to make a strong case to the Federal Trade Commission (FTC) and state attorneys general about the negative impact this proposed merger will have on patient access to community pharmacy and the healthcare delivery system," said NACDS President and CEO Steven C. Anderson, IOM, CAE and NCPA CEO B. Douglas Hoey, RPh, MBA. "Community pharmacy believes it's imperative to act now to protect patients. Today's legal filing builds upon the ardent efforts by community pharmacy to prevent the proposed merger through an 'all-levels, all branches of government' strategy to protect patients and community pharmacy.

"Community pharmacies have aggressively engaged in opposition to the merger—at the executive level through meetings and communications with the FTC and state attorneys general; and at the legislative level by testifying before the House and Senate. Engaging with the courts is another component in that process," said Anderson and Hoey.

Since the announcement last summer that Express Scripts and Medco sought to merge their companies, pharmacies have aggressively demonstrated that this one combined entity would create a middleman that will have enormous power to dominate the market in anticompetitive ways.

The merged company would reduce access and service to patients; reduce competition for PBM services, particularly to large plan sponsors; reduce competition for specialty pharmaceutical services; and reduce competition in mail order services, allowing the combined entity to raise mail order prices and drive business to their own mail order pharmacies regardless of patient preference. 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 for plans and patients, and limit access to pharmacy patient care.

In addition to community pharmacy efforts, seventy-six Members of Congress have written to the FTC raising concerns about the proposed mega merger and what it will mean for their constituents. More than 30 states attorneys general are also investigating the competitive impact of this merger. In addition, leading consumer groups have weighed in reinforcing the anti-consumer effects this merger will have on Americans.

"Community pharmacy has unsurpassed value in improving health and reducing costs across the board. We believe that this legal action will put further emphasis where it should be—on patients," said Anderson and Hoey.

"We look forward to continuing to work with the FTC and state attorneys general as they continue their investigations. We believe there is compelling evidence that warrants the FTC and the states attorneys general blocking this merger. We will also continue to engage with the many Members of Congress who have expressed concern about the merger as we seek to work with all branches and all levels of government to prevent the grave harm this merger would cause to health plans, pharmacies and patients," said Anderson and Hoey.

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. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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