AAI Calls For Extensive Investigation of Express Scripts Wellpoint Merger

May 12 2009
White Papers

The AAI has submitted a white paper to the Federal Trade Commission asking them to conduct an extensive investigation into the competitive impact of the proposed acquisition of Wellpoint’s Pharmacy Benefit Manager (PBM) subsidiary, Next RX, by Express Scripts, Inc.  The AAI paper states the acquisition poses a threat of significant anticompetitive harm in the PBM services market by combining two of the four largest national PBMs.

The AAI believes the past Administration's lax attitude toward PBM and health insurance mergers has resulted in higher concentration, higher prices, and less compensation for providers which harms their ability to provide high quality services.  This merger, which will give the three dominant PBMs an 80 percent market share, poses a serious risk of harm to consumers, according to AAI President Bert Foer.

The AAI white paper also observes that past acquisitions of specialty pharmaceutical companies by Express Scripts have not benefitted consumers, but rather led to rapidly increasing prices for vital drugs.  

The merger directly relates to two policy issues addressed at length in the AAI’s report to President Obama’s transition team "The Next Antitrust Agenda": 1.) the treatment of buyer power in mergers and 2.) the scrutiny of healthcare intermediaries such as health insurers and PBMs.  In both of these areas, the AAI believes antitrust agencies need to strengthen their analysis and fully protect consumers.  

Read the paper here.

For comment, contact the paper's author, David Balto, at 202-662-2781.