A federal judge will hold a hearing Tuesday afternoon on a request to immediately stop Express Scripts Inc.'s $29.1 billion acquisition of fellow pharmacy benefits manger Medco Health Solutions Inc.
St. Louis-based Express Scripts said April 2 it had completed the acquisition, which it first announced last summer. The closing came after the Federal Trade Commission voted to close its investigation into the deal, clearing the last hurdle in its path.
The deal creates a combined PBM that will handle the prescriptions of more than one in three Americans.
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Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, government agencies and other clients, using their large purchasing power to negotiate lower drug prices. They make money by reducing costs for health plan sponsors and members.
Express Scripts' announcement that it closed the deal came a few days after an alliance of drugstores and community pharmacists filed a federal lawsuit seeking to stop the acquisition. They fear the combination would create a giant pharmacy benefits manager with too much leverage and market share. Their complaint was filed in the U.S. District Court for the Western District of Pennsylvania
The National Association of Chain Drug Stores and the National Community Pharmacists Association has warned that the deal could reduce competition and service for patients and raise mail-order drug prices, among other consequences. They've filed a motion asking a federal judge in Pittsburgh for an injunction that stops the deal "to prevent immediate imminent and irreparable harm" to patients, plan sponsors and the lawsuit's plaintiffs.
Attorneys for the PBMs argue that the lawsuit does not adequately allege "irreparable" injury. The PBMs have said the combination of the two companies will both lower costs and improve patient care.
BMO Capital analyst Dave Shove called the request for an injunction a long shot because the plaintiffs must convince the judge there is a threat for severe and immediate harm, and the deal's impact won't be felt for several months, when PBM customers renew their contracts.
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