2 Drug Firm Mergers Might Not Be a Given

A federal judge is suggesting now that he is siding with federal antitrust enforcers who oppose two mergers involving the nation’s top drug wholesalers, sending shares of Bergen Brunswig Corp. and AmeriSource Health Corp. into a decline.

Orange-based Bergen’s stock skidded $3.94 to $47.94 a share, while AmeriSource’s stock dropped $5.94 to $66.06.

McKesson Corp., the nation’s leading drug wholesaler, is seeking to buy No. 4 AmeriSource, while No. 3 Cardinal Health Inc. is attempting to acquire Bergen, the second largest wholesaler. McKesson shares were off $1.81 to $88, while Cardinal dropped $2.38 to $98.63.

For the second day, U.S. District Judge Stanley Sporkin pointed harsh questions toward a witness for the companies, Homer Dunn, a logistics consultant who supports the combinations. Several times Sporkin pushed Dunn to tell him, “Why is two better than four?”

Sporkin said he wasn’t satisfied with Dunn’s response that cost savings would result from combining warehouses and reducing duplicative services.

Earlier in the week, Sporkin had expressed sympathy with the combinations, sparking a big rise in the shares of the companies, led by AmeriSource.

The Federal Trade Commission challenged both proposed combinations, saying the consolidation could result in consumers paying more for prescription drugs. The companies contend it would be impossible to raise prices because they’re being squeezed between big, powerful drug manufacturers on one end of the distribution chain and large chain drugstores on the other.

Sporkin is expected to decide by the end of the month whether to grant the FTC’s request for a court order blocking the mergers until a full trial can be held before an administrative law judge.