Medco Acquisition
On July 21, 2011, Express Scripts announced that it was acquiring Franklin Lakes, New Jersey-based Medco Health Solutions. On April 2, 2012, Express Scripts announced that it gained regulatory approval from the FTC for its 29.1-billion-dollar acquisition of Medco Health Solutions Inc. Together, it is estimated that the new combined company will cover prescription benefits for one in three Americans. After an eight month review period, the FTC concluded that the Express Scripts-Medco merger would not “unduly increase” the company’s pharmacy bargaining power or harm consumers and patients with rare, complex, or chronic conditions. The Commission majority stated the following in demonstrating approval for the merger amid a characteristically competitive and innovative market:
- “The acquisition of Medco by Express Scripts will likely not change these dynamics: the merging parties are not particularly close competitors, the market today is not conducive to coordinated interaction, and there is little risk of the merged company exercising monopsony power. Under these circumstances, we lack a reason to believe that a violation of Section 7 of the Clayton Act has occurred or is likely to occur by means of Express Scripts' acquisition of Medco."
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