Recently, there was an excellent op-ed on the Express Scripts/Medco Health Solutions merger by Steven Pearlstein in The Washington Post. I have been covering the potential hazards that this merger would have not only on local community pharmacies, but on the consumers. Pearlstein really outlines why this merger, and in particular, why the merger of two large entities can have a negative impact.
With the merger of Express Scripts/Medco Health Solutions, you would have one major pharmacy benefit management company, who would make the small community pharmacies face the pressures from big retailers and the PBMs. Pearlstein noted:
The independent pharmacists have good reason to be concerned — because of competition from the big retail chains and the PBMs, they’ve become an endangered species. Some of this is the result of competition that is thuggish and unfair and results in inferior and less-convenient service for customers. But some of it reflects the hard economic reality that mail order is a cheaper and more efficient way to fill prescriptions and scale is important when negotiating prices with patent-wielding monopolists in the pharmaceutical industry. Over time, we will miss them the way we miss the local ice cream parlor and dressmaker.
The other issue that arises from this merger is the fact that consumers will not receive the care and attention that the pharmacists at the local pharmacies provide. Many of these pharmacists know their customers and their medical backgrounds, especially in terms of which medication interferes with another.
Will the consumer be able to benefit from this merger without having to pay more? Pearlstein noted that it would all have to depend on the competition of other regional PBMs. With Express Scripts and Medco (two of the larger PBMs) merging, this will reduce the price competition, thus causing the prices to rise.
This merger is a bad idea, and one that could be detrimental to many who use local pharmacies and those who own them. Perhaps, it is time for the Federal Trade Commission to wake up and stop this merger.