January 10, 2012 / 5:40 PM / 7 years ago

Consumers groups seek to stop Medco, Express Scripts deal

WASHINGTON (Reuters) - A coalition of consumer groups urged U.S. antitrust regulators on Tuesday to stop Express Scripts Inc from buying Medco Health Solutions Inc MHS.N, arguing healthcare companies that hire pharmacy benefits managers fail to protect consumers from higher prices.

U.S. PIRG, the Consumer Federation of America, the National Consumers League and others argued that healthcare plans, which often hire pharmacy benefit managers to handle their members’ prescription needs, will not prevent PBMs from passing on higher prices or giving patients poor service.

“Health plans have distinctly different interests, and thus have not been adequate protectors of consumer concerns,” they wrote in the letter to Federal Trade Commission Chairman Jon Leibowitz.

“As the PBM market continues to consolidate, health plans will only become less able to protect consumers. This merger will create a dominant PBM with the market power and leverage to effectively force plans into restricted networks that will ultimately harm consumers.”

The FTC is reviewing the merger to make sure it complies with antitrust law.

Express Scripts ESRX.O disagreed that its deal would hurt patients.

Express Scripts’ goal is to “drive out waste in healthcare, drive down cost of medications and improve outcomes,” said Express Scripts spokesman Brian Henry. “We have done so with all of our clients, including health plans.”

The $29 billion deal, which was announced in July, would combine two of the three U.S. pharmacy benefit managers that are large enough to manage prescription drug benefits for nationwide companies.

The companies argue the deal would give the combined company even more leverage to negotiate better prices with drugstores and pharmaceutical companies.

The groups signing the letter were the Consumer Federation of America, Community Catalyst, U.S. PIRG, the National Consumers League and NLARx.

The two companies’ shareholders overwhelmingly approved the transaction in December.

The deal is also opposed by community pharmacies, which are under huge pressure from big box stores that offer low prices and PBMs.

Reporting By Diane Bartz; editing by Andre Grenon

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