Critics point to reduced competition, higher costs.
Industry insiders are buzzing about the impact Cigna’s $67 billion acquisition of Express Scripts will have on healthcare.
B. Douglas Hoey, MBA, CEO of NCPA tells Drug Topics that while the organization is still assessing the implications of the merger, one thing is clear: “Consolidation among healthcare giants leads to fewer choices for patients and plan sponsors.”
Hoey says merging healthcare companies tend to claim their moves will result in cost savings to patients and health plan sponsors, but the available evidence from previous consolidations suggests otherwise. The merger of UnitedHealth and Catamaran a few years ago, says Hoey, didn’t change the upward trajectory in healthcare spending.
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“We’re seeing the growing balkanization of the healthcare industry-a world in which patients may be forced into a healthcare kingdom: the CVS-Aetna kingdom, the Cigna-Express Scripts kingdom, the UnitedHealth-OptumRx kingdom, et cetera-where the borders aren’t porous, and patients are stuck with what they get,” says Hoey.
He adds that lack of choice could trap some patients in inflexible pharmacy and healthcare networks that dictate the decision-making process for the delivery of care.
“We have expressed significant concerns about the proposed CVS-Aetna [deal] and believe similar concerns apply in this instance,” Hoey says. Continued vertical healthcare consolidation could impede competition and foreclose any meaningful entry into the market, leading to fewer choices and higher healthcare costs.” Hoey says NCPA believes rigorous antitrust scrutiny is critical to protect competition and ensure affordable patient access.
Adam J. Fein, PhD, CEO of Drug Channels Institute, says although Cigna was an unexpected acquirer, the deal reflects the growing trend toward pharmacy and medical benefit integration. “It also reinforces the role that the PBMs play in the drug channel. PBMs are now linked closely to the expensive specialty drugs that treat smaller patient populations, not to the primary care blockbusters of yesteryear.” Drug Channels Institute provides insight into the U.S. pharmacy distribution and reimbursement system.
Fein says the strategic logic behind the merger is much more evident for Express Scripts than Cigna. “Perhaps that’s why the stocks reacted so differently [the day the merger was announced]. Express Scripts’ stock closed up 9%, while Cigna’s stock closed down 12%.”
Al Babbington, CEO of PrescribeWellness, a cloud-based healthcare communication company that helps healthcare professionals address medication adherence issues, says transparency on drug pricing is paramount to the reduction of costs, and consumers want to be empowered with knowledge and choice. “These factors will destroy the old PBM models. It's not surprising the largest independent PBM has found a new home."
Babbington adds: "I am concerned that this acquisition, like the CVS/Aetna merger, is going to limit choice for consumers. Express Scripts only contracts with a handful of pharmacy services administrative organizations (PSAOs) and aggressively promotes mail order. Patients need the choice of seeing their local, trusted pharmacist in face-to-face visits. Health literacy is the number one factor for lack of adherence.” He says that PBMs promoting 90-day fills via mail order may, on the surface, appear to improve adherence-they may even increase Star ratings-however, Babington says it is not the best alternative for the majority of patients. “Aligning all medications to the same fill date and seeing their local pharmacist once a month has a much great impact on health."
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Frederick Mayer, RPh, CEO of Pharmacy Planning Services Inc., says that over the past 10 years similar large mergers between insurance carriers, PBMs, and managed care organizations have not resulted in much better healthcare or lower prescription drug costs. “We have seen these mergers resulting in larger prices for prescription drugs, larger premiums for patients and consumers, and no better quality of care being documented,” says Mayer. PPSI promotes consumer public health education and pharmaceutical information.
In a press release, Cigna and Express Scripts asserted that the acquisition will create an expanded portfolio of health services, deliver greater consumer choice, and put health and pharmacy services within reach of everyone that they serve.