Butterfield Calls for Hearing on Merger of Two Pharmacy Benefit Management Companies

Jan 19, 2012
Press Release

WASHINGTON, DC – Congressman G. K. Butterfield (D-NC), Ranking Member of the House Commerce, Manufacturing, and Trade Subcommittee, today sent a letter to Subcommittee Chairman Mary Bono Mack (R-CA) requesting a hearing to review the potential impact of a proposed merger between Express Scripts Inc. (ESI) and Medco Health Solutions Inc., two of the nation’s largest pharmacy benefit management (PBM) companies.  In his letter Butterfield wrote, “Given the enormity of the proposed merger and its potential to threaten fair and adequate access to health care and pharmacy services for all Americans, our Subcommittee should carefully examine its true impact on consumers.  For example, we should explore the claims that this merger will be able to generate savings for consumers.”

In December, Butterfield wrote to Federal Trade Commission Chairman Jon Leibowitz expressing similar concerns regarding this merger, and urged Leibowitz to take careful consideration of the merger’s impacts on sensitive populations.  Butterfield said, “Pharmacy Benefit Managers have long touted their ability to generate savings for consumers.  However, I question the savings alleged by ESI and Medco, and have only heard anecdotal evidence of the decrease in prescriptions or health care premiums.  In fact, many have expressed that the opposite is true.  I fear that giving a consolidated PBM even greater market power could potentially worsen this already troublesome situation.”

The full text of the letter to Bono Mack is below.

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January 19, 2012

The Honorable Mary Bono Mack

Chairman

House Committee on Energy and Commerce

Subcommittee on Commerce, Manufacturing, and Trade

2123 Rayburn House Office Building

Washington, DC 20515

 

Dear Chairman Bono Mack:

 

In July 2011, Express Scripts Inc. and Medco Health Solutions Inc., two of the largest pharmacy benefit management (PBM) companies, announced a merger agreement.  The combined company will control one-third of the total PBM market share.  Because the Subcommittee on Commerce, Manufacturing and Trade (CMT), which you chair, has jurisdiction over consumer protection and competitiveness, I urge you to hold a hearing to review the impacts of this merger.

Given the enormity of the proposed merger and its potential to threaten fair and adequate access to health care and pharmacy services for all Americans, our Subcommittee should carefully examine its true impact on consumers.  For example, we should explore the claims that this merger will be able to generate savings for consumers. 

Also, community pharmacists have stated that “this merger would further disrupt this marketplace, to the detriment of patients, true competition, and lower prices.”   Local pharmacists play an integral and important role in Eastern North Carolina, where they are often intimately connected with the health care of their customers and my constituents.  I would be troubled if this merger impacted the level of service or damaged the current system of pharmacy delivery of drug and drug care services.

I am aware that the Federal Trade Commission (FTC) is currently reviewing this proposed PBM merger.  In fact, in a letter dated December 19, 2011 (attached), I wrote to FTC Chairman Jon Leibowitz expressing my concerns regarding this merger, and urging him to take careful consideration of the merger’s impacts on sensitive populations.  However, just as a Senate Committee was able to hold a recent hearing on this matter, it is appropriate for a House Committee to do the same even though the matter pending before the FTC.

Low-income, rural, and minority populations already struggle with access to affordable much needed prescriptions medications.  Given that this merger will affect the lives of millions of people and the potential for serious consequences to low-income communities, members of the CMT Subcommittee have a responsibility to thoroughly and carefully examine this proposal.  I respectfully request you hold a hearing on the proposed merger of Express Scripts Inc. and Medco Health Solutions Inc. as soon as possible.

Thank you for your consideration.

 

                                                            Very truly yours,

                                                           

                                                            G. K. Butterfield

                                                            Member of Congress