Sunday, March 3, 2013
Posted by D. Daniel Sokol
Mike Cowie (Dechert) and Paul Denis (Dechert)analyze The Fall of Structural Evidence in FTC and DOJ Merger Review.
ABSTRACT:With the collapse of the AT&T/T-Mobile merger, the FTC’s investigation of the $34 billion merger of Express Scripts and Medco Health Solutions became the biggest story last year in antitrust merger enforcement. Opponents, largely competitors, lobbied and litigated against the deal based on large market shares and other structural evidence of market concentration in the pharmacy benefit management (PBM) business.
Yet when the FTC cleared the deal, the Commission’s detailed closing statement made scant mention of market share, market concentration, or other traditional structural evidence. The near omission of structural evidence from the Express Scripts/Medco closing statement was not an oversight. FTC staff remarks and our own experience representing Medco in the transaction show that the closing statement accurately reflects the course of the investigation. Very little time was spent on structural issues. The FTC’s decision on Express Scripts/Medco represents a significant, visible sign that structural evidence no longer plays the role it once did in agency merger analysis.