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

DATE: February 28, 2018

Washington, DC — The Senior Care Pharmacy Coalition (SCPC) today said the proposed merger between pharmacy giant CVS Health and health insurer Aetna represents a dangerous step towards governmental acceptance of an increasingly integrated, consolidated, oligopolistic health care system – flying in the face of the free market principles that define the American economy and allowing a shrinking number of “mega-companies” to control every aspect of Americans’ 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, negative ramifications for consumer access to affordable prescription drugs,” he said, commenting on today’s House Judiciary Subcommittee hearing on “Competition in the Pharmaceutical Supply Chain” and the proposed CVS Health-Aetna merger. “Further merger and acquisition activities, rapidly accelerating vertical and horizontal integration and growing secrecy threaten the nation’s commitment to free and fair markets — and Congress, the Federal Trade Commission (FTC) and the Department of Justice (DoJ) must carefully scrutinize this CVS Health-Aetna proposal.”

In 2018, Rosenbloom observed, “No player along the drug distribution chain faces a bigger challenge validating its legitimacy and value proposition than pharmacy benefit managers (PBMs), who have quietly and deliberatively transformed themselves into a classic oligopoly.” CVS Caremark, Express Scripts and Optum Rx — the nation’s three largest PBMs – now control more than 80% of prescriptions dispensed in America. For seniors living in the nation’s long term care (LTC) facilities, and served by LTC pharmacies, this percentage jumps to more than 90%.

LTC pharmacies, a distinct subset within the pharmacy community, serve a specialized population of seniors in skilled nursing centers, assisted living facilities and other residential care settings. The typical patient suffers from multiple chronic conditions, significant impairments in daily living activities, mild to moderate dementia, and takes 12-13 prescription medications daily – making drug prices and access to needed medications an essential variable in maintaining vulnerable seniors’ well-being.

The SCPC President and CEO said more than 60% of hospital readmissions from nursing centers involve medication issues. Effective oversight and ready access to medications as part of a patient’s clinical care are the most important factors in reducing hospital readmissions and associated costs. “Health care consolidation – spearheaded by vertical and horizontal integration among companies like CVS Health, cross-market mergers like the proposed Aetna transaction and PBM-driven drug market manipulation – is detrimental to an already precarious LTC pharmacy balancing act caused by far greater federal and state statutory and regulatory obligations than familiar retail pharmacies,” he said.

“PBMs’ biggest crisis is not public relations – it is one of basic operational policy,” concluded Rosenbloom. “Any 21^st Century business model premised upon hiding facts from consumers, and claiming it their right to make secret deals behind closed doors is, and should be, a target for federal reform.”

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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 seniorcarepharmacies.org  to learn more.