The proposed merger between Express Scripts, Inc. (NASDAQ: ESRX) and Medco Health Solutions, Inc. (NYSE: MHS) has seen its shares of watchdogs point out that the deal will not be a good one for consumers. Whether or not that is the case to you personally probably depends upon a myriad of factors.
A new letter issued by The American Consumer Institute has issued a letter to the Federal Trade Commission expressing its concerns about the merger should the two pharmacy benefit management companies be allowed to merge. The $29 billion merger “would only exacerbate the conflicts of interest and concentration of market power that already exist in the PBM industry, and would in no way benefit consumers.”
The ACI noted that it is strongly opposed to this merger and has noted that the PBM sector already poses anticompetitive risks for consumers.
There is a reason that there is an arbitrage of about 12% between the current Medco price and the buyout price, although some of this may be because the deal is cash and stock rather than all stock or all cash. The Department of Justice noted in early September that this merger would have an extended antitrust review.
Medco Health Solutions, Inc. (NYSE: MHS) is down 0.6% at $61.00 today while Express Scripts is down 1.3% at $49.03.
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