PharMerica agrees with FTC lawsuit blocking Omnicare takeover

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PharMerica agrees with FTC lawsuit blocking Omnicare takeover
PharMerica agrees with FTC lawsuit blocking Omnicare takeover

The Federal Trade Commission filed a lawsuit blocking long-term care pharmacy provider Omnicare's takeover of its rival PharMerica. The federal agency said that a merger of the two largest pharmacy services providers would harm competition in the industry and allows Omnicare to increase prices of drugs for Medicare beneficiaries.

In its suit, the FTC cites concerns raised by the Centers for Medicare & Medicaid Services that the takeover "appears likely to result in higher reimbursement rates . . . and thereby to increase the cost to CMS (and therefore the U.S. government and U.S. taxpayers) as well as any individuals who pay out-of-pocket costs in connection with such services."

Omnicare first made an offer to buy PharMerica in September. But according to the FTC, Omnicare's acquisition of PharMerica would result in it serving about 57% of all licensed skilled nursing facility beds in the United States, and that “under the merger guidelines used by the FTC and Department of Justice, a transaction that leads to that much market concentration would be presumed illegal.” Omnicare currently owns over 200 long-term care pharmacies in 44 states; PharMerica owns 97 pharmacies in 43 states.

PharMerica said Monday that it supports the FTC's lawsuit.

"We are pleased the FTC has made a prompt decision to resolve the competitive issues surrounding Omnicare's attempted hostile takeover of PharMerica Corporation," PharMerica CEO Gregory S. Weishar, said. "As we have said from the beginning, we believed antitrust clearance would be difficult to achieve and, with that belief now confirmed, we hope that Omnicare will end its hostile pursuit of PharMerica."