Makes you kind of wonder?

We have four major cell providers AT&T, Verizon, Sprint & T mobile.. Recently the Justice dept refused to let the merger of AT&T and T Mobile go thru. Even after the merger, that would have left us with three major players. However, Justice seems destine to allow the merger of Medco & ESI to become a reality.. leaving only TWO MAJOR PLAYERS in the PBM market and the resulting Medco/ESI having the overwhelming majority control of the PBM business in the US.
Where is the logic that having two major players in the this market will make the marketplace more competitive and allowing four competitors in the cellular phone market to shrink to three would not increase competition and benefit the market place.

Some have suggested that the FTC is going to oppose all large mergers this year… at least until after the Presidential election.. because it might be viewed as costing jobs and since this is an election year and the reported unemployment rate is in the 8% range… a number at which no President has ever been re-elected. Or course, if Obama is not re-elected… he becomes a lame-duck President and if he is re-elected he becomes a lame-duck President.

It has been reported that the reimbursement rate that Walgreens rejected from ESI was for $0.40 per Rx. It doesn’t take a MBA to do the math that this is not a business supporting fee. It has also been reported that ESI generates THIRTEEN TIMES the profit from a Rx than Walgreens does.

if those numbers are true.. any contract that is so lop-sided lacks .. in legal terms… mutuality. Walgreens is to be admired for their commitment to maintain a profitable company for the benefit of their stock holders, employees and consumers who have chosen to deal with them.

I hope that those non ESI Rx customers who have been patronizing those other chains… that are falling all over each other to get the “former” Walgreens Rx customers business.. that they become so dissatisfied with those other chains.. that they leave and go to Walgreens.

DISCLAIMER: I do not work for Walgreens, I am a ESI Rx customer that is being forced to move my Rxs and I do own a small number of Walgreens (WAG) stock. That being said… if you read my other posts.. Walgreens – IMO – do have numerous faults and shortcomings.

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