In this issue:
- Home Run: How Express Scripts and Medco won antirust approval
- Green Monster: MHA's billion-dollar price tag highlights GPO valuations
- Free Agents: Consumers are price-shopping for prescriptions
- Batter Up: A look at the latest national track & trace legislation
How Medco Won Antitrust Approval For A Deal Wall Street Considered Doomed
Here’s a fascinating look at the legal strategies used by Medco’s team to get its merger with Express Scripts approved. According to the article, Medco approached Express Scripts with the deal, based in part on its antitrust analysis. I like the behind-the-scenes peek at this controversial transaction, although the article reads a bit like a breathless press release from Dechert’s PR flaks. For a trip down memory lane, see ESRX-MHS: Analysis of the FTC Decision.
Roper Industries To Acquire MHA
In case you missed the news, Managed Health Care Associates, a long-term care group purchasing organization (GPO) and services company, was purchased this month for a cool $1 billion. Given MHA's EBITDA of $95 million, the purchase price equals a 10.5x multiple. MHA claims $6 billion in contracted sales, so the purchase price also represents about 17% of purchasing volume. Big dollars for a niche purchasing group! By comparison, George Hill at Citigroup estimates that MedAssets paid more than 15x EBITDA for Broadlane.
Same Generic Drug, Many Prices
This Consumer Reports article found big differences in cash prices for generic prescriptions. Chains had the highest prices, but it doesn’t really tell the whole story. Most people have third-party insurance, which pays a pharmacy much less than the inflated generic list prices. We’ll be seeing many more such articles, per my comments in What Free Generic Lipitor Says about Pharmacy's Future. CR’s advice: “Request the lowest price.” Translation: Pharmacy schools should teach advanced haggling. Consumer Reports also suggests that independents are the most willing to make a deal. Caveat emptor!
The House Hearing on ‘Securing Our Nation’s Prescription Drug Supply Chain’
The triumph of hope over experience? A bipartisan group is taking another shot at desperately-needed national pedigree and track-and-trace legislation. (Click here to read the discussion draft.) Dirk Rodgers at RxTrace delves into last week's House Energy & Commerce Committee hearings on Securing Our Nation's Prescription Drug Supply Chain. Dirk provides an insightful comparison of the competing proposals. Alas, no one can explain how pedigree or track-and-trace will foil greedy physicians, fake pharmacies, and grey market players. Pedigree laws and track-and-trace technologies won’t work if pharmacy buyers buy outside legitimate channels and don't scan an electronic tag.
D Battery Elected To Philadelphia Sports Hall Of Fame