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Marino Concerned about Pharmacy Benefits Manager Merger

July 22, 2011

U.S. Rep. Tom Marino, PA-10, expressed his concerns regarding the proposed merger of pharmacy benefit management giants Express Scripts and Medco. The agreement, announced today by the two companies, is valued at $29.1 billion and would consolidate two of the three largest pharmacy benefit management firms.

“At a time when I am fighting to give our independent community pharmacies the tools to better compete against large corporations, this merger raises a number of serious questions and concerns,” Marino said. “Hometown pharmacies are already at a substantial disadvantage when it comes to negotiating with the PBMs. This merger could worsen the problem and ultimately lead to increased costs and decreased quality of care.”

The acquisition would give the company almost 50 percent of the pharmacy benefit management market for the insured. According to 2011 Atlantic Information Systems data, the combined mail order facilities would concentrate 59 percent of the mail order market. In 2009, the combined specialty drug market share for Express Scripts and Medco was 52 percent.

“It is critical that we ensure a level playing field for small businesses to allow them to create jobs and pull us out of our current economic crisis,” Marino continued. “I am concerned that this merger further consolidates a market that is already skewed in favor of the giant PBMs. This will ultimately lead to fewer community pharmacies and less options for seniors to receive their medication.”

There are more than 23,000 independent community pharmacies in the United States, providing approximately 300,000 jobs. This is a near-50 percent drop from 1980 when there were 40,000 independent pharmacies in the nation, according to the National Community Pharmacists Association.

Marino is a member of the House Committee on the Judiciary Subcommittee on Intellectual Property, Competition, and the Internet, which has jurisdiction over antitrust matters.

He recently introduced HR 1946, the Preserving Our Hometown Independent Pharmacies Act, a bill that would allow independent pharmacies to join together to negotiate for better terms with the PBMs. The bill is being considered by the House Judiciary Committee and has been endorsed by both the Association of Community Pharmacists Congressional Network and National Community Pharmacists Association.