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PITTSBURGH (Reuters)—A federal judge rejected on Wednesday a request by pharmacy trade groups to derail Express Scripts Inc.'s efforts to integrate rival Medco Health Solutions Inc. following its recent $29.1 billion takeover.
U.S. District Judge Cathy Bissoon in Pittsburgh declined to issue a preliminary injunction to force Express Scripts to divest Medco or keep it separate. She said she will not decide whether to issue a permanent injunction until after ruling on Express Scripts' request to dismiss the case entirely.
"An order holding separate Medco from Express Scripts ... would result in a headless organization that would likely be unable to survive on its own, much less compete against Express Scripts," Judge Bissoon wrote. "This, ironically, is exactly the harm that plaintiffs seek to prevent."
Judge Bissoon also said the plaintiffs did not show how a brief delay in divesting Medco would cause them "immediate" and "irreparable" harm.
Plaintiffs including the National Assn. of Chain Drug Stores, the National Community Pharmacists Assn. and several independent pharmacies had argued that the merger violated antitrust law by reducing competition, and would lead to less consumer choice and higher prescription drug prices.
The March 29 lawsuit was filed four days before Express Scripts said it completed the merger, after having won approval from a divided Federal Trade Commission.
Express Scripts spokesman Brian Henry said the company is pleased with the decision. Lawyers for the plaintiffs did not immediately respond to requests for comment.
The trade groups had sought a court order to keep Medco's assets separate until their claims could be addressed, or else require that Express Scripts divest more assets than it planned.
Express Scripts countered that the plaintiffs waited an inexcusably long eight months after the merger was announced to sue. It also said that halting the integration would cause uncertainty and perhaps cost business.
The merger combined two of the three largest U.S. pharmacy benefits managers. It more than doubled Express Scripts' revenue base and put the St. Louis-based company well ahead of rival CVS Caremark Corp. in processing prescriptions.
In early afternoon trading, Express Scripts shares rose 10 cents to $57.32 on the Nasdaq.
(Reuters)—Shareholders of Medco Health Solutions Inc. on Wednesday overwhelmingly approved its $29 billion acquisition by rival pharmacy benefit manager Express Scripts Inc., although the massive deal still faces an uncertain regulatory review.