[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29183]
[Federal Register: November 28, 1994]
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FEDERAL TRADE COMMISSION
[File No. 941-0102]
Eli Lilly and Company, Inc.; Proposed Consent Agreement With
Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
require, among other things, an Indiana producer of pharmaceutical
products to: Ensure that PCS Health Systems (PCS) maintains an open
formulary; appoint an independent Pharmacy and Therapeutics (P&T)
Committee of health care professionals to objectively evaluate drugs
for inclusion in the PCS open formulary; ensure that PCS accepts all
discounts, rebates or other concessions offered by Eli Lilly's
competitors for drugs that are accepted for listing on the open
formulary, and to accurately reflect such discounts in ranking the
drugs on the formulary; and, for five years, obtain Commission approval
before acquiring an interest in any firm that provides formulary
services to more than 2 million people in the United States. In
addition, the consent agreement would prohibit PCS and Eli Lilly from
sharing proprietary or other non-public information, such as price
data, from competitors whose drugs may be placed on a PCS formulary.
DATES: Comments must be received on or before January 27, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Michael McNeely, FTC/S-3308, Washington, DC 20580. (202) 326-2904.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the
Commission's rules of practice (16 CFR 2.34), notice is hereby given
that the following consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of sixty (60) days. Public comment is invited. Such comments or
views will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR
4.9(b)(6)(ii)).
Agreement Containing Consent Order
The Federal Trade Commission (``Commission''), having initiated an
investigation of the acquisition by Eli Lilly and Company (``Lilly'')
of the PCS Health Systems (``PCS'') business of McKesson Corporation
(``McKesson''), and it now appearing that Lilly, hereinafter sometimes
referred to as ``proposed respondent,'' is willing to enter into an
agreement containing an Order to remedy the alleged lessening of
competition resulting from such acquisition, and providing for other
relief:
It is hereby agreed by and between proposed respondent, by its duly
authorized officer and its attorney, and counsel for the Commission
that:
1. Proposed respondent Lilly is a corporation organized, existing
and doing business under and by virtue of the laws of the State of
Indiana, with its office and principal place of business located at
Lilly Corporate Center, Indianapolis, Indiana 46285.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint here attached.
3. Proposed respondent waives:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. All rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this agreement;
and
d. Any claim under the Equal Access to Justice Act.
4. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance
of this agreement and so notify the proposed respondent, in which event
it will take such action as it may consider appropriate, or issue and
serve its complaint (in such form as the circumstances may require) and
decision, in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the draft of complaint here attached, or that
the facts as alleged in the draft complaint, other than jurisdictional
facts, are true.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
rules, the Commission may, without further notice to the proposed
respondent, (1) issue its complaint corresponding in form and substance
with the draft of complaint here attached and its decision containing
the following Order in disposition of the proceeding, and (2) make
information public with respect thereto. When so entered, the Order
shall have the same force and effect and may be altered, modified or
set aside in the same manner and within the same time provided by
statute for other orders. The Order shall become final upon service.
Delivery by the U.S. Postal Service of the complaint and decision
containing the agreed-to Order to proposed respondent's address as
stated in this agreement shall constitute service. Proposed respondent
waives any right it may have to any other manner of service. The
compliant may be used in construing the terms of the Order, and no
agreement, understanding, representation or interpretation not
contained in the Order or the agreement may be used to vary or
contradict the terms of the Order.
7. Proposed respondent has read the draft of compliant and order
contemplated hereby. Proposed respondent understands that once the
Order has been issued, it will be required to file one or more
compliance reports showing that it has fully complied with the Order.
Proposed respondent further understands that it may be liable for civil
penalties in the amount provided by law for each violation of the Order
after it becomes final.
Order
I
It is ordered, That the following definitions shall apply herein:
A. ``Respondent'' or ``Lilly'' means Eli Lilly and Company, its
predecessors, divisions, subsidiaries, affiliates, partnerships, joint
ventures, successors and assigns, and all directors, officers,
employees, agents and representatives of the foregoing.
B. ``McKesson'' means McKesson Corporation, its predecessors,
divisions, subsidiaries, affiliates, partnerships, joint ventures,
successors and assigns, and all directors, officers, employees, agents
and representatives of the foregoing.
C. ``PCS'' means PCS Health Systems, Inc., its predecessors,
divisions, subsidiaries, affiliates, partnerships, joint ventures,
successors and assigns, and all directors, officers, employees, agents
and representatives of the foregoing.
D. ``Commission'' means the Federal Trade Commission.
E. ``Formulary'' means a listing, by therapeutic category, of
branded and generic ambulatory drug products that are approved for use
by the U.S. Food & Drug Administration (``FDA''), and which is made
available to pharmacies, physicians, third-party payors, or other
persons involved in the healthcare industry, to guide in the
prescribing or dispensing of pharmaceuticals. An ``Open Formulary'' is
a formulary that allows the inclusion of any ambulatory prescription
drug product approved by the FDA for use in the United States, which
the P&T Committee (defined below) determines is appropriate for
inclusion in such formulary. For purposes of this Order, an Open
Formulary may provide truthful information stating or indicating the
relative costs or benefits of drugs on the formulary.
F. ``Pharmacy Benefit Management Services'' or ``PBM Services''
means services provided by a pharmacy benefits manager, such as
formulary services, negotiation of rebates or discounts from
pharmaceutical manufacturers, prescription claims processing, and drug
utilization review.
G. ``Formulary Services'' means the provision, development,
establishment, management or maintenance of a formulary by a pharmacy
benefits manager. For purposes of this Order, ``management'' of a
formulary includes the negotiation and administration of rebate or
discount agreements with pharmaceutical manufacturers for drugs
included on a formulary.
H. ``Lilly Non-Public Information'' means information not in the
public domain that is provided to Lilly in its capacity as a
pharmaceutical manufacturer by a supplier of PBM Services and that
concerns bids, proposals, contracts, prices, rebates, discounts, or
other terms or conditions of sale of any person other than PCS.
I. ``PCS Non-Public Information'' means information not in the
public domain that is provided to PCS in its capacity as a supplier of
PBM Services by a manufacturer or seller of prescription drug products
and that concerns bids, proposals, contracts, prices, rebates,
discounts, or other terms or conditions of sale of any person other
than Lilly.
J. ``Pharmacy and Therapeutics Committee'' or ``P&T Committee''
means a group of healthcare professionals, such as doctors,
pharmacists, and pharmacologists, appointed for the purpose of
evaluating prescription drug products for inclusion on a formulary.
II
It is ordered, That:
A. Within thirty (30) days from the date this Order becomes final,
Lilly shall cause PCS to maintain an Open Formulary. As of the date
this Order becomes final, the PCS ``Clinical Formulary and Prescribing
Guidelines 1994-1995,'' a copy of which is attached hereto as Appendix
A, on file at the Commission, shall be deemed an Open Formulary that
complies with this Paragraph II.A.
B. Within thirty (30) days from the date this Order becomes final,
Lilly shall cause PCS to appoint an independent P&T Committee with the
authority and responsibility to maintain the Open Formulary required by
Paragraph II.A above. Such P&T Committee shall make all decisions
concerning the inclusion of drugs on such Open Formulary, the exclusion
of drugs from such Open Formulary, and the clinical and therapeutic
advice and evaluation concerning drugs on such Open Formulary, and
shall operate according to the following provisions:
1. Such P&T Committee shall consist of at least nine (9) members,
all of whom shall be physicians, pharmacists, pharmacologists, or other
healthcare professionals.
2. A majority of the P&T Committee shall consist of persons who are
not employees, officers, directors, or agents of, and who have no
financial interest in: (a) Lilly, (b) PCS, or (c) any other person who
has an ownership interest in Lilly or PCS. Such persons shall be
referred to herein as ``independent'' members of the P&T Committee.
3. each independent member of the P&T Committee shall have one vote
on all decisions of the P&T Committee.
4. All members of the P&T Committee who are employees, officers,
directors, or agents of, or who have a financial interest in, Lilly,
PCS, or any other person who has an ownership interest in Lilly or PCS,
shall not be entitled to vote on decisions of the P&T Committee.
5. All independent members of the P&T Committee shall be appointed
for three-year terms, except that for the initial board, one-third of
the independent members shall be appointed for one-year terms, one-
third shall be appointed for two-year terms, and the remaining
independent members shall be appointed for three-year terms. At the
expiration of their terms, or upon the occurrence of a vacancy, members
may be reappointed, or new members may be appointed, by a majority of
the then-appointed independent members of the P&T Committee.
6. No independent member of the P&T Committee may be removed except
for cause by vote of a majority of the independent members of the P&T
Committee.
7. In performing its responsibilities in maintaining the Open
Formulary, the P&T Committee shall utilize only criteria relating to
safety, efficacy, FDA approved indications, side effects,
contraindications, pharmacokinetics, patient compliance, physician
follow-up requirements, effect on emergency room visits and
hospitalizations, laboratory tests, cost, and similar objective
factors. Such P&T Committee shall give no preference to the products of
Lilly, or of any other person with an ownership interest in PCS, except
on the basis of such objective criteria.
8. Lilly shall cause PCS to cover the costs and expenses of the P&T
Committee, and Lilly shall cause PCS to indemnify the P&T Committee
against any losses or claims of any kind that might arise out of its
performance of functions under this Order, except to the extent that
such losses or claims result from misfeasance, gross negligence,
willful or wanton acts, or bad faith.
9. Such P&T Committee shall maintain written records, for five (5)
years from the date thereof, explaining the basis and rationale for all
P&T Committee decisions relating to the exclusion of any products from,
or the ranking of products on, the Open Formulary required by Paragraph
II.A.
C. Lilly shall cause PCS to accept all discounts, rebates or other
concessions offered by any manufacturer, seller or distributor of
pharmaceutical products included by the P&T Committee on the Open
Formulary, and Lilly shall cause PCS to ensure that all such discounts,
rebates, or concessions are truthfully and accurately reflected in
determining relative rankings of products on the Open Formulary.
D. Nothing in this Order shall preclude PCS from offering any
formulary other than the Open Formulary to any customer.
E. Lilly shall cause PCS to provide a copy of this Order to each
member of the P&T Committee on or before the date of each such person's
appointment to such P&T Committee.
III
It is further ordered, that:
A. Lilly shall not provide, disclose, or otherwise make available
to PCS any Lilly Non-Public Information; and
B. PCS shall not provide, disclose, or otherwise make available to
Lilly any PCS Non-Public Information.
IV
It is further ordered, That Lilly shall retain all documents, and
shall cause PCS to separately retain all documents, that relate to (A)
the exclusion of any prescription drug products from the Open Formulary
required by Paragraph II.A above, (B) any preference or ranking
accorded to any prescription drug product on the Open Formulary
required by Paragraph II.A above, or (C) statements or indications of
discounts, rebates, or other concessions, as described in Paragraph
II.C above, for a period of five (5) years from the date such document
is created or received.
V
It is further ordered, That Lilly shall disclose the availability
of the Open Formulary as follows:
A. Lilly shall cause PCS to disclose the availability of the Open
Formulary to all persons who currently have an agreement with PCS
concerning PBM services or concerning the inclusion of pharmaceuticals
on a formulary, by providing to each such person a letter containing
the following statement within ten (10) days after initiation of
contact between PCS and such person regarding renewal or extension of
such person's existing agreement with PCS:
PCS maintains an Open Formulary that allows, subject to the
determination of an independent Pharmacy and Therapeutics Committee,
the inclusion of any ambulatory prescription drug product approved
by the FDA for use in the United States. This Open Formulary will be
provided to you upon request.
B. For a period of five (5) years from the date this Order becomes
final, Lilly shall cause PCS to provide in writing the statement set
forth in Paragraph V.A above to each prospective customer of PCS at the
time of PCS's response to such prospective customer's request for
proposal, or at the time of PCS's initial written proposal to such
prospective customer, whichever occurs first.
VI
It is further ordered, That, for a period of five (5) years from
the date this Order becomes final, respondent shall not, without the
prior approval of the Commission, directly or indirectly, through
subsidiaries, partnerships, or otherwise:
A. Acquire any stock, share capital, equity, leasehold or other
interest in any person, corporate or non-corporate, engaged in the
providing of Formulary Services in the United States, if such person
has more than two (2) million lives covered by its Formulary Services
in the United States;
B. Acquire any assets used for, or previously used for (and still
suitable for use for), the providing of Formulary Services in the
United States from any person who has (or had within the two years
preceding such acquisition) more than two (2) million lives covered by
its Formulary Services in the United States; or
C. Enter into any agreement, understanding, or condition with
McKesson or any other wholesaler of pharmaceutical products that Lilly
will sell or distribute pharmaceutical products bearing any brand or
trade name used by Lilly, in the United States or any part of the
United States, exclusively through such wholesaler.
VII
It is further ordered, That respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in the corporate
Respondent such as dissolution, assignment, sale resulting in the
emergence of a successor corporation, or the creation or dissolution of
subsidiaries or any other change in the corporation that may affect
compliance obligations arising out of the Order.
VIII
It is further ordered, That:
A. Within sixty (60) days after the date this Order becomes final,
Respondent shall submit to the Commission a verified written report
setting forth in detail the manner and form in which it intends to
comply, is complying, and has complied with this Order.
B. One year (1) from the date this Order becomes final, annually
for the next nine (9) years on the anniversary of the date this Order
becomes final, and at other times as the Commission may require,
respondent shall file a verified written report with the Commission
setting forth in detail the manner and form in which it has complied
and is complying with this Order.
C. Respondent shall include in its compliance reports a copy of the
Open Formulary required by Paragraph II.A above, and all written
communications, internal memoranda, and reports and recommendations
concerning compliance with the Order.
IX
It is further ordered, That, for the purpose of determining or
securing compliance with this Order, respondent shall permit any duly
authorized representative of the Commission:
A. Access, during office hours and in the presence of counsel, to
inspect and copy all books, ledgers, accounts, correspondence,
memoranda and other records and documents in the possession or under
the control of respondent relating to any matters contained in this
Order; and
B. Upon five days' notice to respondent and without restraint or
interference from it, to interview officers, directors, or employees of
respondent.
X
It is further ordered, That this Order shall terminate ten (10)
years from the date this Order becomes final.
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, an Agreement Containing Consent Order from Eli Lilly and
Company (``Lilly'' or ``Proposed Respondent'') in resolution of
antitrust concerns arising from Lilly's proposed acquisition of PCS
Health Systems, Inc. (``PCS'') from McKesson Corporation
(``McKesson'').
The proposed consent order (``Order'') has been placed on the
public record for sixty (60) days for reception of comments by
interested persons. Comments received during this period will become
part of the public record. After sixty (60) days, the Commission will
again review the Agreement and the comments received and will decide
whether it should withdraw from the Agreement or make final the
Agreement's proposed Order.
The Commission has reason to believe that Lilly's acquisition of
PCS would substantially lessen competition in violation of section 7 of
the Clayton Act, as amended, 15 U.S.C. 18 and section 5 of the FTC Act,
as amended, 15 U.S.C. 45. The Order, if issued by the Commission, would
settle the allegations of the proposed Complaint (``Complaint'').
The Complaint in this matter alleges that Lilly is engaged in the
development, production and sale of pharmaceutical products, including
Prozac, an antidepressant (specifically, a selective serotonin reuptake
inhibitor); Humulin, an injectable insulin; Ceclor, an oral antibiotic;
and Axid, an anti-ulcer product (specifically, an H2 antagonist). It
further alleges that through its subsidiary PCS, McKesson is engaged in
the business of providing pharmacy benefit management (``PBM'')
services to insurance companies, third party payors, and other members
of the healthcare industry.
The Complaint further alleges that a relevant line of commerce
within which to analyze the effects of this acquisition is the
provision of PBM services by national full-service PBM firms, and any
narrower markets contained therein. Other relevant lines of commerce
within which to analyze the effects of this acquisition are the
development, manufacture and sale of pharmaceutical products in
specific therapeutic categories, and narrower markets contained therein
(including, but not limited to, the markets for injectable insulin,
selective serotonin reuptake inhibitors, H2 antagonists, and anti-ulcer
drugs). It further alleges that the relevant market for PBM services by
national full-service PBM firms, as well as the relevant markets for
pharmaceutical products in specific therapeutic categories, are highly
concentrated.
The Complaint further alleges that there are substantial entry
barriers into the relevant markets. Even if new entry were to occur, it
would take a long time, during which time substantial harm to
competition could occur.
The Complaint further alleges that as part of its PBM services, PCS
maintains a drug formulary, which is a listing, by therapeutic
category, of ambulatory drug products that are approved for use by the
U.S. Food & Drug Administration, and which is made available to
pharmacies, physicians, third-party payors, and other persons, to guide
in the prescribing and dispensing of pharmaceuticals. Lilly
pharmaceutical products are included on the PCS formulary. PCS provides
a variety of other PBM services, including claims processing, drug
utilization review, pharmacy network administration, and related
services. PCS negotiates with pharmaceutical manufacturers, including
Lilly, concerning placement on the PCS formulary, rebates, discounts,
prices to be paid for pharmaceutical products purchased pursuant to
pharmacy benefit plans managed by PCS, and other issues. PCS thereby
influences the prices of pharmaceutical products and the availability
of such products under the PCS pharmacy benefit plans.
The Complaint further alleges that the Agreement and Plan of Merger
contains a Memorandum of Understanding (``MOU'') in which Lilly and
McKesson agreed to investigate closing Lilly's distribution centers and
having McKesson handle physical distribution of Lilly products to
wholesalers and possibly be the sole distributor of Lilly products.
Implementation of this MOU would force wholesalers to deal with
McKesson to obtain Lilly products or deny them access to Lilly
products.
The Complaint further alleges that the effects of the proposed
acquisition of McKesson by Lilly may be substantially to lessen
competition in the relevant markets in violation of section 7 of the
Clayton Act, as amended, 15 U.S.C. 18, and section 5 of the Federal
Trade Commission Act, as amended, 15 U.S.C. 45, in the following ways,
among others:
(a) Products of manufacturers other than Lilly are likely to be
foreclosed from the PCS formulary;
(b) Reciprocal dealing, coordinated interaction, interdependent
conduct, and tacit collusion among Lilly and other vertically
integrated pharmaceutical companies will be enhanced;
(c) PCS will be eliminated as an independent negotiator of
pharmaceutical prices with manufacturers;
(d) Incentives of other manufacturers to develop innovative
pharmaceuticals will be diminished;
(e) Entry into the relevant markets may be more difficult because
it will require entry at more than one level;
(f) Competition among drug wholesalers may be reduced because of
the competitive advantage that control over Lilly drugs will provide
McKesson; and,
(g) The price of pharmaceuticals is likely to increase and the
quality of the pharmaceuticals available to consumers is likely to
diminish.
The Complaint further alleges that the proposed acquisition of
McKesson by Lilly would, if consummated, violate section 7 of the
Clayton Act, as amended, 15 U.S.C. 18, and section 5 of the Federal
Trade Commission Act, as amended, 15 U.S.C. 45. It further alleges that
the Agreement and Plan of Merger between Lilly and McKesson violates
section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.
45.
The Order requires Lilly to maintain an open formulary, and
provides that the existing open PCS formulary will comply with this
provision. A copy of this formulary is appended to the Order. For the
purposes of the Order an open formulary is defined as a formulary that
allows the inclusion of any ambulatory (i.e., non-hospital)
prescription drug product which the PCS independent Pharmacy and
Therapeutics Committee (``P&T Committee) determines is appropriate for
inclusion in such formulary.
The Order requires that Lilly appoint an independent P&T Committee
to administer the open formulary. This committee will make all
decisions concerning the inclusion and exclusion of drugs on the open
formulary. The order sets forth the parameters under which the P&T
Committee is to operate.
The Order also requires that Lilly cause PCS to accept all
discounts, rebates or other concessions offered by any other
manufacturer of pharmaceutical products on the open formulary, and
requires that all such discounts, rebates and concessions be truthfully
and accurately reflected in determining relative rankings of products
on the open formulary. Nothing in the Order prohibits Lilly from
offering closed formularies as well as the open formulary.
The Order also prohibits Lilly and PCS from providing, disclosing,
or otherwise making available to each other Non-Public Information.
This includes information concerning other persons' bids, proposals,
contracts, prices, rebates, discounts, or other terms and conditions of
sale.
The Order also requires Lilly to retain all documents, and cause
PCS to separately retain all documents, for five years, relating to the
exclusion of any prescription drugs from the open formulary, any
preference or ranking accorded to any prescription drug on the open
formulary, and statements or indications of discounts, rebates or other
concessions.
The Order also requires Lilly to make known the availability of the
open formulary to persons who currently have a PBM service agreement of
formulary agreement with PCS, and (for a period of five years) to
prospective customers.
The Order also prohibits Lilly, for a period of five (5) years from
the date the Order becomes final, from: Acquiring, without the prior
approval of the Commission, any stock, share capital, equity, leasehold
or other interest in any person, corporate or non-corporate, engaged in
the providing of Formulary Services in the United States, if such
person has more than two (2) million lives covered by its Formulary
Services in the United States; acquiring any assets used for, or
previously used for (and still suitable for use for), the providing of
Formulary Services in the United States from any person who has (or had
within the two years preceding such acquisition) more than two (2)
million lives covered by its Formulary Services in the United States;
or entering into any agreement, understanding, or condition with
McKesson or any wholesaler of pharmaceutical products that Lilly will
sell or distribute pharmaceutical products bearing any brand or trade
name used by Lilly, in the United States or any part of the United
States, exclusively through such wholesaler.
The Order also compels Lilly to fulfill certain standard
notification, reporting and inspection requirements.
The Order terminates ten years from the date it becomes final.
It is anticipated that the Order would resolve the competitive
problems alleged in the Complaint. The purpose of this analysis is to
facilitate public comment on the Order, and it is not intended to
constitute an official interpretation of the agreement and Order or to
modify it in any way.
The proposed consent order has been entered into for settlement
purposes only, and does not constitute an admission by the respondent
that the law has been violated as alleged in the complaint.
Donald S. Clark,
Secretary.
Joint Statement of Chairman Janet D. Steiger and Commissioner Christine
A. Varney in Eli Lilly/McKesson, File No. 941-0102
We voted in favor of the proposed consent agreement with Eli
Lilly and Company (``Lilly'') in connection with its acquisition of
PCS Health Systems, Inc. from McKesson Corporation. We believe the
consent agreement offers immediate effective relief, avoids
protracted litigation, and represents the best non-structural relief
available to remedy the potential anticompetitive consequences of
the transaction. Moreover, the proposed consent achieves these goals
and allows potential efficiency gains to be realized.
However, we remain concerned about the overall competitive
impact of vertical integration by drug companies into the pharmacy
benefits management market. Through monitoring this proposed order
and through analysis of these evolving markets, the Commission
intends to assess all the ramifications of vertical integration
here.
Dissenting Statement of Commissioner Mary L. Azcuenaga
Eli Lilly and Company, Inc., File No. 941-0102
Today, the Commissioner accepts a consent order for public
comment that exudes a lack of conviction in the underlying theory of
competitive harm on which the order is based. The order does not
cure the competitive problems alleged in the complaint. Three of the
four primary provisions in the order are inadequate, and the fourth,
which addresses a memorandum of understanding between Lilly and
McKesson, is based on no colorable factual showing of a violation of
law. In addition, there is no justification for making the duration
of the order half that of other Commission orders. Finally, imposing
this order without addressing similar acquisitions raises a question
of evenhandedness and leaves unanswered the broader question of the
competitive effect of vertical integration in this industry.
I dissent.
[FR Doc. 94-29183 Filed 11-25-94; 8:45 am]
BILLING CODE 6750-01-M
