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Last updated on April 20, 2014 at 8:14 EDT

New Jersey Jobs, Pharmacy Choice Endangered by Proposed Express Scripts-Medco Merger

January 27, 2012

ALEXANDRIA, Va., Jan. 27, 2012 /PRNewswire-USNewswire/ — New Jersey would lose over 2,400 jobs, local economies would suffer and patients may be denied their choice of pharmacy if the proposed mega-merger of two prescription drug middlemen goes through, the National Community Pharmacists Association (NCPA) said today.

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“Unless this merger is stopped, pharmacists fear that virtually everyone in the Garden State will lose,” said NCPA CEO B. Douglas Hoey, RPh, MBA. “Patients could be forced to use mail order pharmacies, some local jobs and economic activity would disappear and prescription drug prices would increase.”

The Federal Trade Commission (FTC) is currently reviewing the proposed merger of pharmacy benefit managers (PBMs) Express Scripts, Inc. and Franklin Lakes-based Medco Health Solutions. The multi-billion-dollar companies are already among the country’s largest PBMs, which administer prescription drug plans and operate mail order pharmacies.

In New Jersey, the companies collectively manage pharmacy benefits for 350,000 state employees and their dependents as well as 39,775 of the Defense Department’s TRICARE beneficiaries.

By merging, a combined Express Scripts-Medco company would have unprecedented market dominance and face considerable shareholder pressure to grow its mail order pharmacy’s market share. Should the mega-PBM convert 30 percent of the retail prescriptions that it manages to mail order (a conservative assumption), NCPA estimates that independent community pharmacies would lose $88.3 million in annual revenue and lay off 1,718 full-time employees. Other ancillary businesses in New Jersey would lose an estimated $75.9 million in annual revenue and will lay off 687 full-time employees.

In reality, the economic losses for the state would likely be worse than these numbers suggest as Express Scripts-Medco lowers pharmacy reimbursements for prescriptions filled locally. Moreover, NCPA’s analysis only incorporates a portion of the health plans managed by Express Scripts or Medco and thus likely underestimates the merger’s total economic impact on the state. It also does not address any layoff of Medco employees in the state, which are possible should the PBMs win approval to combine operations.

“Patients in New Jersey’s underserved rural and inner-city communities are especially at risk as their only pharmacy may be forced out of business,” Hoey added. “The country’s leading consumer groups oppose this merger and nearly 40 U.S. Senators and Representatives have also voiced their concern. We strongly urge New Jersey’s congressional delegation to weigh in with the FTC before it’s too late.”

New Jersey’s independent community pharmacies generate $2.9 billion in annual revenue and employ 7,590 individuals full-time. By extension, these small businesses also support $2.6 billion in additional local revenue annually and 3,630 full-time employees.

The National Community Pharmacists Association (NCPA®) represents the interests of America’s community pharmacists, including the owners of more than 23,000 independent community pharmacies. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to www.ncpanet.org or read NCPA’s blog, The Dose, at http://ncpanet.wordpress.com.

SOURCE National Community Pharmacists Association


Source: PR Newswire