9/20/2011 2:34 PM 

Pharmacist, 40-year community pharmacy veteran: Express Scripts-Medco merger would be a “tipping point in PBM market consolidation”

Dennis Wiesner, senior director of privacy, pharmacy and government affairs for National Association of Chain Drug Stores (NACDS) member H-E-B (San Antonio, Texas), testified before a House panel today about the negative effects – ultimately on consumers – if the proposed merger between pharmacy benefit managers (PBM) Express Scripts and Medco were approved. The Judiciary Subcommittee on Intellectual Property, Competition and the Internet held a hearing today titled “The Proposed Merger between Express Scripts and Medco.”

“I have grave concerns about this proposed merger,” Wiesner said. “It would be a tipping point in PBM market consolidation, harming patients, as well as government and private health plans and employers. There is only one stakeholder that would benefit: the new mega PBM.”

PBMs operate as middle-men, negotiating and managing prescription drug coverage plans for employers, insurance plans and the government.

“If approved, nearly 135 million Americans would rely on this mega PBM to manage their prescription benefits,” said Wiesner. He noted that the Federal Trade Commission has issued a rare “second request” to examine the proposed merger more closely, and urged for thorough scrutiny of the magnitude of control that the proposed new PBM would exert over various markets and sub-markets.

Directly confronting the crux of Express Scripts and Medco’s argument for the merger, Wiesner noted “there is no proof that they pass along their purported savings to health plans, employers or consumers.”

Rather, Wiesner warned that “reducing patient choice and access will lead to higher prescription drug costs, and potential adverse patient outcomes and higher downstream health costs.” He described anti-consumer effects of the proposed merger, including reduction or elimination of patients’ choice of pharmacy providers, including shifting consumers into the PBM’s own mail order facility. Potential consequences of this include reducing the likelihood that a pharmacy will have the complete prescription profile that is necessary to help protect patients from harmful drug interactions. Reduced patient-pharmacist interactions also could diminish efforts to enhance medication adherence – or the practice of taking medications correctly – which is essential for improving health and reducing healthcare costs.

Commenting further on the unprecedented power that the potential “mega-PBM” would hold, Wiesner said, “PBMs already operate in an opaque manner. They are middlemen in a unique position to dictate contract terms to health plans and pharmacy providers. The new mega PBM would have even greater ability to dictate one-sided, unfavorable contract terms to pharmacies, health plans and employers, ultimately harming consumers. That is one reason we oppose the merger, and seek legislative relief on PBM practices.”

Wiesner concluded, “PBMs already use a lack of transparency, failing to pass through rebates from drug manufacturers to consumers and other payers, inflating drug costs for health plans and employers, and lowering payments to pharmacies for their own personal financial gain. Patients appear to be an afterthought. A mega-PBM would have an increased ability to engage in similar egregious conduct to the detriment of consumers, payers, and pharmacy providers.”

To view Dennis Wiesner’s testimony, please click here.