[Congressional Record Volume 158, Number 61 (Thursday, April 26, 2012)]
[Extensions of Remarks]
[Pages E673-E674]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   POTENTIAL IMPORT OF THE MERGER OF EXPRESS SCRIPTS, INC., AND MEDCO

                                 ______
                                 

                         HON. G.K. BUTTERFIELD

                           of north carolina

                    in the house of representatives

                        Thursday, April 26, 2012

  Mr. BUTTERFIELD. Mr. Speaker, I rise today to draw attention to the 
potential impact of the merger of two major pharmacy benefit managers 
(PBMs), Express Scripts, Inc. and Medco. The Federal Trade Commission 
(FTC) recently decided not to oppose this merger, which combines two of 
the ``Big Three'' PBMs. However, the FTC decision was not unanimous; in 
fact, one FTC Commissioner who opposed the merger called it a ``game 
changer.''
  The merger of Express Scripts and Medco now means that the top two 
PBMs will cover approximately 72 percent of the privately insured 
Americans. This ``mega PBM'' will have the ability to raise prices for 
health plans and patients, limit access to pharmacy patient care and 
force patients to use the PBM's mail order pharmacies rather than their 
trusted community pharmacies, driving up costs for employers, health 
plans and other federal and state programs.
  Additional concerns resulting from the Express Scripts and Medco 
merger include increased market concentration in the PBM market, with 
decreasing competition. The ``Big Three'' PBMs controlled approximately 
80 percent of the national prescription drug plan market for large 
plans. This merger reduces the options for large plans from three to 
two. For large health plans that have typically selected one of the 
``Big Three'' PBMs, the merger creates a firm with more than 50 percent 
market share.
  The new mega PBM alone will control over 40 percent of the national 
prescription drug volume. Approximately 135 million Americans--more 
than one-third of all Americans--will rely on this new ``mega PBM'' to 
manage their prescription benefits. The merger combines two of the 
three largest suppliers of specialty pharmacy services, consolidating 
an excessive share of all specialty pharmacy sales. The merger creates 
the nation's largest mail-order pharmacy accounting for close to 60 
percent of all mail-order prescriptions processed in the United States. 
This is a very troubling situation.
  I have actively sought to bring this issue to the forefront, through 
floor speeches, letters to the FTC, and calls for hearings in the House 
Energy & Commerce Committee. I am concerned that this ``mega PBM'' will 
only exacerbate the problems for community pharmacies and consumers 
caused by PBMs currently. Already, many PBMs disallow pharmacies the 
ability to appeal pricing decisions with which they disagree. It is 
documented that they often mandate that a covered individual use a 
specific retail pharmacy, mail order pharmacy, specialty pharmacy or 
other pharmacy or entity. This is exceedingly problematic in places 
like the First Congressional District, where there are limited options 
for seniors and the disabled to reach certain pharmacies.
  Only a handful of states directly regulate some PBM functions, such 
as how they conduct audits of pharmacies, and some state

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boards of pharmacy regulate them to the extent that their activities 
can be construed as practicing pharmacy. The vast majority of their 
remaining functions and activities are unregulated.
  We must do more to rein in some of the worst abuses of PBMs against 
community pharmacies and consumers. In addition to supporting state 
actions against the Express Scripts/Medco merger, I am a cosponsor of 
H.R. 4215, the Medicare Pharmacy Transparency and Fair Auditing Act, 
important legislation that will protect patients and providers from the 
egregious practices of PBMs. Similar legislation that includes the 
provisions of H.R. 4215 has been introduced in the Senate. This 
legislation will help level the playing field between neighborhood 
pharmacies and PBMs and ensure Americans have access to see the 
providers of their choice. PBMs are the little-known, but powerful, 
virtually unregulated middlemen that administer prescription drug 
benefits for most Americans.

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