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Case study: Express Scripts/Medco acquisition

George Rozanski
October 2012
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Bates White conducted extensive economic analysis on behalf of Express Scripts in connection with its $29 billion acquisition of Medco Health Solutions. The analysis, which was presented to the Federal Trade Commission as well as state enforcement agencies, showed adverse competitive effects were unlikely in any relevant market. Bid data were used both to investigate the current structure of competition and to calibrate merger simulation models that demonstrated there would be no unilateral incentive to increase price after accounting for anticipated efficiencies. The analysis also addressed possible coordinated effects and monopsony concerns. The FTC unconditionally approved the merger after an eight month investigation, finding no likelihood of unilateral effects, coordinated effects, or exercise of monopsony power.