ALEXANDRIA, Va. — U.S. Sen. Herb Kohl, D-Wis., drew praise from the National Association of Chain Drug Stores for raising concerns about the proposed Express Scripts and Medco merger in a letter to Federal Trade Commission Chairman Jon Leibowitz.
“Express Scripts’s proposed merger with Medco will unquestionably create a giant PBM that is substantially larger than any competitor, and will result in the combined entity having a dominant market share in mail order and specialty pharmacies. It will reduce choices for PBM services to health plan sponsors, especially large employers. And it has the potential to have profound effects on the ability of both community and chain drug stores to compete,” Kohl wrote in the letter to FTC.
The letter goes on to describe skepticism that the merger would result in cost-savings for patients, employers and health plans.
“There is considerable doubt that PBM mergers in the past have resulted in any savings being passed on to plan sponsors,” Kohl said. “While the promise that reduced reimbursement payments will in fact be passed on to plan sponsors is very speculative, the evidence we received at our hearing is that the threat to pharmacies is very real.”
Kohl issued the letter as a follow-up to a subcommittee hearing he chaired last December about the proposed merger.