The Federal Trade Commission (FTC) turned thumbs down on Omnicare’s attempted acquisition of competitor PharMerica. The agency filed suit in federal court to block the hostile takeover.
FTC charged that the deal would have given Omnicare access to about 57% of the licensed skilled nursing facility beds in the country and significantly reduced competition. Omnicare owns more than 200 long-term care pharmacies in 44 states. PharMerica has 97 in 43 states.
The next largest long-term care pharmacy provider would serve about 2% of the market. More than 1.6 million Medicare Part D beneficiaries and their prescriptions are at stake in the decision.
“If Omnicare is allowed to purchase its biggest and only national competitor, it will diminish competition and raise healthcare costs – leaving taxpayers and patients to foot the bill,” said Richard Feinstein, director of the FTC Bureau of Competition.
Omnicare disputed FTC’s charge that the acquisition would reduce competition in the SNF Medicare Part D marketplace.
“We strongly disagree with the FTC’s decision to seek to block the proposed transaction,” the company said in a statement. “The institutional pharmacy business is competitive and Omnicare is confident it would remain so after the transaction.”
PharMerica supported the FTC position.
“We are pleased the FTC has made a prompt decision to resolve the competitive issues surrounding Omnicare’s attempted hostile takeover of PharMerica Corporation,” CEO Gregory Weishar said. “As we have said from the beginning, we believed antitrust clearance would be difficult to achieve and, with that belief now confirmed, we hope that Omnicare will end its hostile pursuit of PharMerica.”