Saturday, October 11, 2003

Antitrust News: Political Review Requested

The reason the FTC isn't subject to substantial congressional oversight is that the agency is an able-and-willing tool of congressmen who want to mount political attacks on potentially unpopular business deals. Case in point:
Caremark RX Inc. said U.S. antitrust enforcers had requested more information about its proposed $5.6 billion takeover of AdvancePCS, signaling that the two will get government scrutiny.

Caremark, which would become the No. 2 pharmacy-benefit manager behind Medco Health Solutions Inc. if the transaction is concluded, said in a joint statement with AdvancePCS that the companies had received a request for additional information from the Federal Trade Commission.

The FTC had until yesterday to seek more information and open a full investigation or to let the transaction proceed. Caremark said Wednesday that Florida and other states also were reviewing the transaction. Seven Democratic members of Congress urged the FTC to investigate.

''This proposed merger will consolidate two of the nation's four largest publicly traded'' pharmacy-benefit managers, the lawmakers, led by Sen. Mark Pryor, D-Ark., and U.S. Rep. Henry Waxman, D-Calif., said in a letter to FTC Chairman Timothy Muris. ''Effective FTC oversight is critical to ensuring a competitive pharmaceutical market,'' the lawmakers wrote.
Now if you're the FTC, do you ignore the pleas of influential congressional Democrats that have a say in your budget, or do you accept the invitation to exercise arbitrary political power over a private merger?

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