Omnicare Abandons Plan to Buy Rival Pharmacy in Light of FTC Lawsuit; FTC Votes to Dismiss its Complaint Seeking to Block the Transaction

The Federal Trade Commission has dismissed the complaint it issued in January seeking to block Omnicare, Inc.'s hostile acquisition of rival long-term care pharmacy provider PharMerica Corporation, in light of Omnicare's recent decision to abandon the proposed transaction.

The Commission voted 4-0 to dismiss the complaint, after Omnicare announced on Tuesday that it had allowed its tender offer to acquire the outstanding shares of PharMerica Corporation to expire.

"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. "As we said last month when we filed our complaint, this deal would have harmed an especially vulnerable group of patients – those in long-term care facilities – as well as taxpayers, who foot much of the bill under Medicare, by raising the price of drugs for Medicare Part D consumers and others."

The FTC issued the complaint in January, alleging that the combination of the two largest U.S. long-term care pharmacies would significantly increase Omnicare's already substantial bargaining leverage and likely would make the combined firm a "must have" for Medicare Part D prescription drug plans, which are responsible for providing subsidized prescription drug benefit coverage to Medicare beneficiaries, including most patients who live in skilled nursing facilities. The FTC alleged that the combined firm would have an anticompetitive advantage in negotiating prices it charges Part D health plans for long-term care pharmacy services.