The proposed merger between Express Scripts and Medco is a significant transaction. By combing two of the country's largest pharmacy benefit managers ("PBM"), the merger will create the nation's largest PBM.

PBMs perform an essential function within the healthcare system, serving as important intermediaries between health plan sponsors, such as large private or government employers, and pharmacies that disburse drugs to the beneficiaries of those health plans. PBMs lower the price of prescription drugs for consumers by negotiating with pharmacies for lower rates, seeking reimbursements from drug manufacturers, and reducing drug costs through mail order disbursement. In performing this role, PBMs manage the vast majority of drug prescriptions throughout the United States.

The proposed merger has the potential either to create meaningful efficiencies that provide significant savings for consumers or instead to increase the size and power of a single entity in a manner that could result in anunbalanced market. As became apparent at the Subcommittee's hearing on December 6, 2011, the economic analysis of this transaction is complex and ultimately turns on defining the relevant markets and identifying accurate estimates for the combined entity's market share within any such market.

While efficiency is important, we must balance efficiency against the very real needs of patients and consumers who often benefit from the professional care provided by a community pharmacist. There are times and places in this country in which community pharmacists are a vital component in the delivery of quality health care and positive outcomes.  

In light of what is at stake, I expect the Federal Trade Commission to take a careful look at this transaction and am confident it will do so. The merged entity will be large and will have a substantial share of the country's mail order and specialty drug markets. If the merged entity were able to exercise undue market power in its negotiations with pharmacies, it could have a deleterious effect on community pharmacies, which perform an important service in my state and throughout the country.

At the same time, I hope and trust that the FTC will carefully consider the significant efficiencies that will result from the merger, as well as market conditions that will allow for a number of mid-sized PBMs to continue to grow and compete with the merged entity, now and in the future. Particularly in such a dynamic and innovative market, government regulators must be careful not to intervene in a manner that will constrain productive market forces. It is
vital to remember that the antitrust laws are not intended to protect competitors but rather to serve the public by maximizing consumer welfare.