CVS-Aetna Merger Proposal Emblematic of Growing Arms Race to Consolidate, Control Consumer Access to Health Care, Prescription Drugs

DATE: October 27, 2017

In Wake of HELP Hearing on Rising Drug Prices, Merger Plan Criticized as Anti-Consumer Shell Game

Washington, DC — The Senior Care Pharmacy Coalition (SCPC) today said the proposed merger between pharmacy giant CVS Health and health insurer Aetna represents another dangerous step toward governmental obeisance to an increasingly integrated, consolidated and oligopolistic system effectively allowing a shrinking number of mega-companies to control every aspect of health care.

“The proposed CVS Health-Aetna merger is emblematic of the growing arms race to consolidate and control consumers’ access to prescription drugs,” warned Alan G. Rosenbloom, President and CEO of SCPC, the only federal advocacy organization devoted exclusively to the interests of the nation’s LTC pharmacies and the patients they serve. “The merger proposal has dramatic, deleterious ramifications for consumer access to affordable prescription drugs.”

Yesterday, press reports highlighted Amazon’s move into the wholesale pharmacy business. Earlier this week, health insurer Anthem announced it will launch its own “in house” pharmacy benefit manager (PBM) to be administered by CVS Health. “These developments – in addition to the proposed CVS Health-Aetna proposal – provide continuing evidence that the bigger players intend to get even bigger, with consumers and caregivers closest to consumers being the big losers,” Rosenbloom said.

“By their very design and intent, these new relationships — as well as the proposed mergers — are a shell game premised upon keeping consumers, providers, lawmakers and regulators alike in the dark about the operational details and costs associated with each link in the drug distribution chain,” Rosenbloom continued.

During a Health, Education, Labor and Pensions (HELP) Committee hearing last week regarding the prescription drug distribution chain and its impact on patient costs, Chairman Lamar Alexander (R-TN) and Senator Lisa Murkowski (R-AK) expressed exasperation about pricing determinations, systemic complexity and the ongoing mystery about “where the money goes.”  Deals like the CVS Health-Aetna proposal, Rosenbloom said, “will increase the complexity and mystery — not only for prescription medications, but for health insurance and health care overall.”

“I have yet to figure out where [the money] goes,” Alexander said. For her part, Murkowski said, “Even those of us that are listening to you as supposed experts, it’s all Greek, and we’re not doing anything to help the consumer.” (STAT 10/17/17)

At the hearing, it was noted that payments drug manufacturers make to PBMs top $100 billion each year, and that PBMs sometimes keep rebates, sometimes share them with insurance companies, and occasionally deign to share them with consumers or government payers. “However, these arrangements remain shrouded in secrecy to the detriment of consumers, caregivers and federal payment programs, particularly Medicare,” the SCPC leader observed.

Concluded Rosenbloom: “Further merger and acquisition activities, rapidly accelerating vertical and horizontal integration and growing secrecy threaten the nation’s commitment to free and fair markets. Congress, the Federal Trade Commission (FTC) and the Department of Justice (DoJ) should carefully scrutinize efforts like the CVS Health-Aetna proposal, which accelerate oligopolistic domination across the nation’s health care system. We believe they should prevent such overtly anti-competitive and manipulative transactions from proceeding.”

####

The SCPC is the national association for independent LTC pharmacies. Our member pharmacies provide care and services to patients in LTC facilities across the country occupying approximately 675,000 beds. Visit us at www.seniorcarepharmacies.org to learn more.