A federal judge will hold a hearing Tuesday afternoon on a request to immediately stop Express Scripts Inc.'s $29.1 billion acquisition of fellow pharmacy benefits manger Medco Health Solutions Inc.
St. Louis-based Express Scripts said April 2 it had completed the acquisition, which it first announced last summer. The closing came after the Federal Trade Commission voted to close its investigation into the deal, clearing the last hurdle in its path.
The closing also came a few days after an alliance of drugstores and community pharmacists filed a federal lawsuit seeking to stop the acquisition, which has raised some antitrust concerns in Congress. The National Association of Chain Drug Stores and the National Community Pharmacists Association, among other plaintiffs, fear the combination would create a giant pharmacy benefits manager with too much leverage and market share. Their complaint was filed in the U.S. District Court for the Western District of Pennsylvania.
They have warned that the deal could reduce competition and service for patients and raise mail-order drug prices. They've filed a motion that asks the court to stop the companies' integration until the court finishes a deeper review of their antitrust lawsuit.
The deal creates a combined pharmacy benefits manager that will handle the prescriptions of more than one in three Americans. The benefits managers have said their combination will both lower costs and improve patient care.
Pharmacy benefits managers run prescription drug plans for employers, government agencies and other clients, using their large purchasing power to negotiate lower drug prices. They make money by reducing costs for health plan sponsors and members.
Dave Shove, an analyst for BMO Capital, called the request for an injunction to immediately stop the deal a long shot because the plaintiffs must convince the judge there is a threat for severe and immediate harm. He noted that the deal's impact won't be felt for several months, when pharmacy benefits managers customers renew their contracts.
Shares of Express Scripts fell 41 cents to $55.91 in Tuesday morning trading, while broader trading indexes were down less than 1 percent.