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By Michael Fitzhugh

Express Scripts’ (NASDAQ:ESRX) planned $29.1 billion acquisition of Medco (NYSE:MHS) will receive fresh scrutiny next week when a U.S. House subcommittee convenes a hearing to review federal concerns about the deal. Fears that a combination of the two companies would put too much power to negotiate drug discounts and set drug formularies into too few hands has driven widespread interest in the deal.

The hearing is planned for September 20, and comes just a little more than two weeks after the U.S. Federal Trade Commission indicated heightened interest in the competitive aspects of the planned merger by making a second request for information from the companies. The FTC request, made September 2, extended the amount of time Express Scripts and Medco will have to wait to get clearance to merge, though Express Scripts said in a recent regulatory filing that it still expects the merger agreement will close in the first half of 2012.

A list of witnesses for the hearing, to be held before the Subcommittee on Intellectual Property, Competition, and the Internet, has been drafted but has not yet been finalized. It could include representatives of groups such as the National Community Pharmacists Association and the National Association of Chain Drug Stores, both of which have opposed a merger of the two large pharmacy benefit managers.

Consolidation in the pharmacy benefits management industry has lead to “higher drug costs, decreased patient access to pharmaceutical care and lower quality of care,” argued the National Community Pharmacists Association in a statement before a separate hearing on health care industry consolidation held by the House Way and Means Committee’s Subcommittee on Health on September 9.

If the deal succeeds, it would create the largest pharmacy benefits manager nationwide, controlling nearly one third of the market. Its next largest competitor, CVS-Caremark (NYSE:CVS), was formed in 2007 after CVS beat Express Scripts’ effort to acquire CareMark Rx.

Source: Express Scripts-Medco Deal Gets Another Going-Over