As Health Care Giants Merge, Pharmacies Aren't Happy

By Julie Rovner

Published April 2, 2012 at 6:57 PM CDT

It remains to be seen whether bigger will actually be better.

Two of the biggest behind-the-scenes players in the health care industry have become one.

Express Scripts sealed its long-planned deal to buy Medco Health Solutions on Monday after the Federal Trade Commission voted 3-1 that it would not stifle competition in the industry. The two companies already provide prescription drug benefit services to some 135 million people — more than 1 out of every 3 Americans.

But while the FTC might not think the $29 billion union of Express Scripts and Medco threatens the market for how prescription drugs are distributed to patients, owners of brick-and-mortar drugstores certainly do.

The National Association of Chain Drug Stores and National Community Pharmacists Association have been running a furious lobbying campaign against the deal for months called . They insist their members cannot compete with the much larger pharmacy benefit managers, and particularly those firms' mail-order pharmacies.

In fact, owing to a contract dispute, patients whose pharmacy benefits are handled by Express Scripts are currently unable to purchase drugs at Walgreens, the nation's largest pharmacy chain. Medco customers, however, will apparently continue to have access to Walgreens, at least until current contracts expire, even under the merged entity.

Meanwhile, the community pharmacy groups say they will persist with a lawsuit filed last week in federal district court in Pennsylvania, despite the fact that the deal is now complete.

A statement issued Monday by the NACDS and NCPA said they "and the other plaintiffs will file a motion with the court today, requesting that the judge direct Express Scripts and Medco to keep separate their assets pending review of the lawsuit and/or schedule an expedited review of the merits of our case."

So what might this mean for consumers? As Rachel Lippmann noted in Shots last fall, the two companies say the deal will help control health care costs, but it remains to be seen whether bigger will actually be better.