Join        Login             Stock Quote

Will Antitrust Claims Stop Express Scripts/Medco Health Merger?

 March 30, 2012 12:26 PM

There have been rumors that the Attorneys General (AGs) of New York, Pennsylvania, Ohio, Texas and California may attempt to block the $29 billion merger between Express Scripts,Inc. (NASDAQ:ESRX) and Medco Health Solutions, Inc. (NYSE:MHS).

Today, the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA), and nine retail pharmacy companies filed a lawsuit against the proposed mega merger of pharmacy benefit managers Express Scripts and Medco Health Solutions.

[Related -Express Scripts Holding Company (ESRX): Should You Own ESRX in 2014?]

The lawsuit, which was filed in the U.S. District Court for the Western District of Pennsylvania, would have dire consequences for patients and the retail community pharmacies.

The lawsuit alleges that the merged company would reduce access and service to patients; reduce competition for PBM services, particularly to large plan sponsors; reduce competition for specialty pharmaceutical services, and reduce competition in mail order services, allowing the combined entity to raise mail order prices and drive business to their own mail order pharmacies regardless of patient preference.

Moreover, the merged entity is expected to control a large share of the supply line for brand and generic prescription drugs, and thereby have the ability to raise prices for plans and patients, and limit access to pharmacy patient care.

[Related -Can Abbvie Inc (NYSE:ABBV) Trump Gilead Sciences, Inc.'S (NASDAQ:GILD) HCV Lead?]

Recently, both companies have agreed with the federal trade commission (FTC) not to close the transaction at the scheduled expiration of the deal's Hart-Scott-Rodino 30-day waiting period that ended March 12. The companies now expect the deal to close in the earlier part of the second quarter of 2012.

The extension provides the FTC the opportunity to review the deal further, to develop and explore possible remedies or divestiture requirements that would pave the way for ultimate deal approval.

The threat of antitrust lawsuits sparked fresh concerns in the minds of investors over the closure of the deal.

However, a Wall Street analyst said it is unlikely that the AGs could stop the consummation of the deal.

"We have learned some key information from our political consultants.

Next Page >>12


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

article imageThe Single Best Place To Invest Your Money For Retirement

It was never supposed to be this daunting. At least that's what we were read on...

article imageNegative Blowback From Negative Interest Rates

The Federal Reserve is widely expected to leave interest rates unchanged today. But perhaps standing pat read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

How To Profit From The Shutdown Aftermath
More Articles on: Medical

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.