Reuters: Regulatory News: UPDATE 1-US FTC clears Express' Medco buy after long review

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UPDATE 1-US FTC clears Express' Medco buy after long review Apr 2nd 2012, 12:43 Mon Apr 2, 2012 8:43am EDT * Commission votes 3-1 to close probe * Dissenting voter says FTC should have sued to stop deal * Express Scripts, Medco announce deal is completed April 2 (Reuters) - U.S. antitrust regulators approved Express Scripts Inc's purchase of rival Medco Health Solutions Inc, the Federal Trade Commission said on Monday, following a contentious eight-month review. The $29 billion deal, first announced in July, combines two of the three largest U.S. pharmacy benefit managers into the clear industry leader. Separately, the companies announced they had completed the deal. Medco and Express Scripts maintain that a combined company with more clout would benefit consumers by driving down prescription costs, while critics had said the deal would lead to higher prices and worse service for patients. Pharmacy benefit managers, or PBMs, administer drug benefits for employers and health plans and run large mail-order pharmacies. The commission voted 3-1 to close its investigation into the deal. The majority of commissioners stated that their investigation revealed a "competitive market for PBM services characterized by numerous, vigorous competitors who are expanding and winning business from traditional market leaders." "The acquisition of Medco by Express Scripts will likely not change these dynamics," the statement said. In her statement dissenting with the majority, Commissioner Julie Brill called it a "merger to duopoly with few efficiencies in a market with high entry barriers -- something no court has ever approved. "I therefore respectfully submit that the Commission should have filed a complaint in Federal district court seeking to enjoin the transaction pending a full trial on the merits here at the Commission," Brill said. The decision comes after months of tension for traders anxious to know if the deal would go through. At one point, shortly after the deal was announced, Medco's share price was 27 percent below the offer value. Express Scripts said it still expected $1 billion in cost savings and other synergies from the acquisitions. The deal is expected to slightly add to earnings per share in the first year after closing, Express Scripts said. Link this Share this Digg this Email Reprints

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