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Major pharmacy chains expected to merge this week

Bottles of prescription pills go through an automated packaging machine in the Medco pharmacy plant in Willingboro, N.J. Medco's state-of-the-art automated pharmacy, the largest in the world, can dispense up to one million prescriptions a week. Express Scripts is looking to close a deal to takeover Medco this week. The combined companies will handle the prescription drugs of 135 million Americans.

Jeremy Hobson: When you go to the pharmacy to pick up your prescriptions, chances are you interact with either Express Scripts or Medco. Those companies process prescription drug claims. And this week, they're expected to finalize a merger with each other.

That's got some pharmacy chains worried, as our senior business correspondent Bob Moon reports.


Bob Moon: Brace yourself for less choice. That's what an ad from the pharmacy groups says will happen:

Radio ad: They'll be able to tell me when, where and how to get my medicine. They'll be able to squeeze big profits out of patients. Medco-Express Scripts? Too big.

But Brian Henry, a spokesman for Express Scripts, says the goal is beefing up bargaining power.

Brian Henry: What pharmacy benefit managers like Express Scripts and Medco do -- and we think we'll be able to do more of in the future -- is accelerate our ability to help drive down costs, and help improve the quality.

One way to do that, he says, is giving consumers the cheaper option of buying their drugs by mail. But the pharmacy groups complain Express Scripts and Medco combined could funnel even more business to their own in-house mail-order firms, freezing out the local pharmacies. Henry insists that's not so.

Henry: Home delivery is an option that we offer to clients and patients to opt into.

Don Bell speaks for the National Association of Chain Drug Stores. He says the merger could doom many corner pharmacies.

Don Bell: Pharmacies will have to cut service, cut their hours, have forced layoffs of employees and even closing of pharmacies.

And with reduced competition, he argues, consumers could end up paying more.

I'm Bob Moon for Marketplace.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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