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FTC sues to stop Omnicare-PharMerica merger

Claims the deal would stifle competition and raise drug prices for seniors

The U.S. Federal Trade Commission (FTC) filed an administrative complaint on Friday, hoping to put the kibosh on Omnicare’s $441 million bid to buy its competitor PharMerica Corp.

According to the FTC, Omnicare and PharMerica are the top two long-term pharmacy service companies in the country, supplying drugs to nursing homes and long-term care facilities. Their joining would harm competition and potentially permit Omnicare to raise drug prices for senior citizens, the FTC says.

The Centers for Medicare & Medicaid services—the overseers of the U.S. government’s health care plans for the poor and elderly—are on the FTC’s side, and have voiced their opinion against the merger.

Richard Feinstein, director of the FTC’s Bureau of Competition said in a statement that "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."

The FTC is already in the process of examining a similar, bigger deal between two pharmacy benefit managers: Express Scripts Inc.’s $29 billion bid for Medco Health Solutions Inc. Experts say that the FTC could end up litigating either case, Thomson Reuters reports. For now, though, the Omnicare deal will be reviewed by an administrative law judge at the FTC. If they lose the case there, the companies can appeal in the regular court system.

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