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FTC Stalls Omnicare/PharMerica Merger

| Feb 15, 2012 | News

PotentiallyPrescription pills.jpg stalling the merger of two giants in the long-term pharmaceutical services industry, the Federal Trade Commission (FTC) recently issued an antitrust complaint objecting to Omnicare’s impending merger with PharMerica Corporation.

According to the government complaint, if the merger were to proceed, Omnicare’s $441 million acquisition of PharMerica would create a combined firm with control over at least 57 percent of the market for long-term pharmaceutical care, giving it substantial bargaining leverage.
According to the FTC’s complaint, the result would be a dramatic reduction in market competition, monopolistic price discrimination, and an increase in prices for nursing homes.
The FTC complaint also suggests that the merger would mean less control over the price of prescription drugs and higher costs for the Centers for Medicare and Medicaid Services (CMS). As many of Omnicare’s and PharMerica’s customers are nursing home residents who are beneficiaries of Medicare, an increase in drug prices would be passed on to CMS. These costs, the complaint alleges, would ultimately be borne by taxpayers.
The FTC is also currently looking into the potential merger of Express Scripts and Medco Health Solutions, but has yet to indicate anything about whether it will approve   The $22 billion Scripts-Medco deal would combine two of the country’s three largest pharmacy benefit managers, intermediaries between the providers and consumers of prescription drugs.   

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