Express Scripts’ acquisition of Medco
Pharmacy benefits manager Express Scripts completed its $29 billion acquisition of Medco Health Solutions after the Federal Trade Commission closed its eight month investigation of the proposed acquisition. Bates White supported Skadden, Arps, Slate, Meagher & Flom in its representation of the merging parties during the FTC investigation by providing economic analysis on a wide range of issues that arose during the investigation. The analysis demonstrated that the proposed transaction would not meaningfully put the combined company in a position to exercise market power in any segment of the market.
This analysis, which Bates White presented to the Federal Trade Commission in the course of its investigation, supported the agency’s conclusion, detailed in its closing statement, that there is “a competitive market for PBM services characterized by numerous, vigorous competitors who are expanding and winning business from traditional market leaders. The acquisition of Medco by Express Scripts will likely not change these dynamics.” The FTC found no likelihood of future unilateral effects, coordinated effects, or exercise of monopsony power resulting from the merger.
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References
Statement of the Federal Trade Commission Concerning the Proposed Acquisition of Medco Health Solutions by Express Scripts, Inc.: http://www.ftc.gov/os/2012/04/120402expressmedcostatement.pdf.