Score one for the Federal Trade Commission.
Less than a month after the agency sued to block Omnicare, Inc.'s hostile takeover of PharMerica Corp., the company abandoned the deal. The FTC yesterday withdrew its administrative complaint, noting that the “most important elements of the relief…have been accomplished.”
The FTC objected that the merger of the two largest long-term care pharmacies in the U.S., which provide medications for people living in skilled nursing facilities, would give the combined entity too much bargaining power over Medicare Part D prices. The result – “higher reimbursement rates paid by Part D sponsors, their beneficiaries, and ultimately, American taxpayers who subsidize the vast majority of the Part D Plans' costs,” according to the complaint.
The FTC in its complaint also noted that PharMerica’s board of directors in public statements rejected Omnicare’s offer because “Antitrust clearance…is likely to be difficult to achieve.”
Omnicare’s $441 million hostile offer could have given it control over distribution of drugs for 57 percent of patients at facilities such as nursing homes and hospices.
"We're gratified that Omnicare has abandoned its efforts to acquire PharMerica. One of the Federal Trade Commission's core missions is protecting competition in the health care market, which helps keep prices down and the quality of care up," said FTC Chairman Jon Leibowitz in a news release.
According to papers filed with the FTC, Omnicare was represented by Roxann Henry, Jacqueline Grise and Tanisha James of Dewey & LeBoeuf and John Harkrider and Daniel Bitton of Axinn Veltrop & Harkrider.