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Health News: Pharmaceutical Merger Expected to Have Big Impact

Health News: Pharmaceutical Merger Expected to Have Big ImpactExpress Scripts Inc. and Medco Health Solutions Inc. won approval from the Federal Trade Commission in early April for their 29.1 billion dollar merger, according to the Wall Street Journal.

This merger created a huge pharmacy-benefit manager that will have significant industry impacts. Pharmacy benefit managers (or P.B.M.’s) manage prescription drug plans for employers and insurers. P.B.M.’s are the middlemen between drug companies and the payers.

The new combined company is predicted to save as much as 1 billion; they will handle one of every three prescriptions written in the U.S. The merger allows Express Scripts and Medco to combine forces and squeeze out a lot of costs, which they then say will be passed on to the consumer.

The decision was not unanimous. Pharmacy and consumer advocacy groups comprise the main opponents of the deal. They argue that the merger will shrink competition, potentially raise prices and limit where patients can get their prescriptions filled. Opponents such as the National Association of Chain Drug Stores and the National Community Pharmacists Association sued to block the deal in federal court. They claim the merger violates anti-trust laws and isn’t in the best interests of patients or consumers.

The merger has raised antitrust issues; many are worried about the effect of such a huge merger on the pharmaceutical industry and the potential of driving other companies out of business. What are your thoughts on the Express Scripts-Medco merger? Is it a step in the right direction in lowering health care costs or a potentially harmful consolidation of assets that could change the industry? Let us know your thoughts.

Our healthcare system is in the middle of a substantial overhaul. From the Express Scripts-Medco merger to the healthcare case being debated in the Supreme Court, our healthcare will see significant changes in the next few years. However none of those changes alter the importance of protecting your employees. At the Dryfoos Group, we understand the importance of providing comprehensive group benefits plan to your employees. We offer a variety of plans that can be custom tailored to fit your specific employee benefits needs. Contact us today for more information.

The facts in this article were provided by the Wall Street Journal, New York Times, and Bloomberg Business Week.

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