Merck, Rvu and others offer a deal for consumers
The three big-name pharmacy chains are offering their own payments services for Medicare beneficiaries, as they try to entice the millions of people who have signed up for the government’s popular drug plan.
A merger of Rauh, the country’s biggest pharmacy chain, and Mercury, the biggest supplier of prescription drugs, would give the two companies control over the $9 billion Medicare program for seniors.
The merger would give Merck a controlling stake in Medicare Advantage, the health care plans for people 65 and older, and would create a merger-controlled provider of prescription drug payments.
Merck is currently in negotiations with the Centers for Medicare and Medicaid Services (CMS), which manages Medicare payments, about a merger with a company controlled by the pharmaceutical industry, the companies said in a joint statement Thursday.
It is unclear how the merger could affect the program, which has become increasingly popular among older people.
Medicare Advantage payments are expected to increase by up to 4 percent a year beginning in 2019.
The announcement comes amid a health care debate over how Medicare should work and whether it should be a single-payer system or an alliance of private insurers.
The U.S. government pays for most of the costs of Medicare through a surcharge on prescription drug prices.
But the program is growing rapidly and is expected to cost more than $700 billion in 2020, and could cost more by 2030.
A recent Kaiser Family Foundation report said a Medicare-run insurance program called Medicare Advantage could become a threat to the viability of the program as the cost of prescription medications rises.
That report predicted that Medicare Advantage premiums could rise to $2,000 per person by 2030 and to $4,000 by 2040.
The Medicare alliance is also opposed by some in the industry who fear it will drive up drug costs.
In a recent interview with CNBC, Dr. David Bresnahan, chief executive officer of Merck & Co., said that it is “unlikely” that the Medicare alliance will be able to survive unless it is taken over by another company.