FTC Should Block Prime/ESI Acquisition of Magellan, NCPA Says

Merger would further exacerbate negative consequences already seen by small-business independent pharmacies and patients

NCPA July 18, 2022

ALEXANDRIA, Va. (July 18, 2022) – The proposed acquisition of Magellan RX Management by Prime Therapeutics LLC/Express Scripts would lead to further consolidation of an already consolidated market, the National Community Pharmacists Association said today, urging that the Federal Trade Commission sue to block the merger.  

Magellan’s primary business is that of a pharmacy benefit manager, wrote NCPA General Counsel Matthew Seiler in a letter to Holly Vedova, Director of the Federal Trade Commission’s Bureau of Competition. If the merger were to proceed, it would allow Express Scripts/Prime to steer patients even more easily to its own mail-order pharmacies for “specialty” drugs and potentially supply it with valuable insight into claims-level data on competitors currently using Magellan so it could cherry-pick patients from competitors. In other words, NCPA says, the consolidation would put even greater pressure on access and affordability and substantially lessen competition.

“Express Scripts/Prime’s combined market power has already enabled each of them to impose unfair fees and claw backs, impose take-it-or-leave-it contracts that often reimburse independent pharmacies less than their costs of acquisition, and steer patients to PBM-owned pharmacies,” says NCPA CEO B. Douglas Hoey, pharmacist, MBA. “It has also harmed patients by refusing access to affordable drugs through formulary exclusions, imposing sometimes unnecessary and burdensome step therapies, higher copays, and less pharmacy choice.

“Further consolidation of an already consolidated market would only serve to heighten this market power. It shouldn’t be permitted to proceed. NCPA urges the FTC to block this proposed acquisition in pursuit of lower costs for consumers and a fair, open, and competitive market for pharmacy.”

Click to view Seiler’s letter.

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Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing nearly 19,400 pharmacies that employ approximately 215,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America’s most accessible health care providers. To learn more, visit www.ncpa.org.

NCPA