WASHINGTON, Jan 27 (Reuters) - U.S. antitrust
regulators moved on Friday to block Omnicare's $441 million bid to buy rival PharMerica Corp, saying the combination would harm
competition and allow Omnicare to raise the price of drugs for
the frailest of the elderly.
Omnicare and PharMerica are the top two companies in the
long-term pharmacy services sector, which provide drugs and
other goods to nursing homes, assisted-living centers, and other
long-term care facilities, the Federal Trade Commission said.
"If Omnicare is allowed to purchase its biggest and only
national competitor, it will diminish competition and raise
health care costs - leaving taxpayers and patients to foot the
bill," Richard Feinstein, director of the FTC's Bureau of
Competition, said in a statement.
The Centers for Medicare & Medicaid Services, that oversees
the government's health plans for the poor and elderly, had
weighed in against the merger.
"The bureau will continue to be vigilant in our efforts to
prevent these sorts of anticompetitive deals," Feinstein added.
The FTC is still reviewing a much bigger deal: Express
Scripts Inc planned buy of Medco Health Solutions Inc.
That $29 billion deal, announced in July, would combine two
of the three U.S. pharmacy benefit managers that are large
enough to manage prescription drug benefits for nationwide
Robert Doyle of Doyle, Barlow and Mazard PLLC said that
investors viewed both cases through the same prism but added:
"One case doesn't have anything to do with another. I don't
believe the two are related."
Bert Foer, head of the American Antitrust Institute, said
the FTC could litigate both cases, if it decided it needed to.
"My feeling is that if they think have a good case in the
Medco/Express Scripts it wouldn't make a difference," he said.
Omnicare went hostile with its $15 a share offer for
PharMerica in September.
Omnicare has about 45 percent of the market for delivering
prescription medicines to people in long-term care, while
PharMerica has about 15 percent, according a source with long
experience in the industry.
Omnicare said in a statement on its website that it strongly
disagreed with the FTC. "The institutional pharmacy business is
competitive and Omnicare is confident it would remain so after
the transaction," the company said.
The two companies have 250 pharmacies nationwide, according
to the trade group Long Term Care Pharmacy Alliance.
The FTC filed an administrative complaint to stop the deal.
An administrative law judge at the FTC will now evaluate it. If
the companies lose in that venue, they can appeal in the regular
(Reporting by Diane Bartz)
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