The merger of Express Scripts with Medco would create a behemoth with a finger in 30 percent of the nation's prescriptions — a fact that surely will raise eyebrows at the Federal Trade Commission, which enforces antitrust laws within this business.

Small pharmacies are already crying that they'll be squeezed on prices by a supersized company. The merger may also be bad news for drugmakers, which bargain over prices with companies such as Express Scripts and Medco. Employers, meanwhile, will have one less competitor lining up to seek their drug benefit business.

On the other hand, Express and Medco argue that their merger will drive down costs for consumers and employers.

Express Scripts and Medco are pharmacy benefit managers. Employers hire them to run their employee drug benefits, hoping to hold costs down. The benefit managers then use their buying clout to demand discounts from drugmakers and pharmacies.

Federal antitrust officials must decide exactly how much clout Express Scripts should command. Regulators could approve the deal, oppose it, or pressure the companies to sell off part of the business to maintain competitive markets.

Top executives of Express Scripts and Medco clearly had the FTC on their minds during a conference call with analysts Thursday. They dwelled repeatedly on the benefits to consumers in terms of lower prices and more efficient service. The deal is "pro-competition, will reduce health care costs, and is very much in the nation's interest," said Express Scripts CEO George Paz.

Medco is the biggest drug benefit administrator in the U.S., with 18.2 percent of the market as of last summer, according to data compiled by Atlantic Information Services. Express Scripts controlled 11.8 percent of the market, ranking third.

Combined, their 30 percent share would far surpass the 17.8 percent share of their nearest competitor, second-ranked CVS/Caremark.

The merger comes as Express Scripts is in the midst of a public spat with Walgreens pharmacies over drug prices. Walgreens has said it will end its contract at the end of December, sending patients covered by Express Scripts searching for other pharmacies. Walgreens says the benefits manager won't pay enough for drugs.

The new marriage partners say they expect no trouble from federal trust-busters. "We're going to work very hard to show the government the value this brings to patients and members as we drive those costs out of the system," said Paz, noting that the merger would bring $1 billion in savings.

But others wished them the worst. The merger "would quite simply make a bad situation much worse for American employers, government agencies, consumers and pharmacists," said the National Community Pharmacists Association.

The group represents independent pharmacies, which claim they are squeezed by benefits management companies demanding deep discounts. "An Express Scripts-Medco company would dominate the market in certain parts of the country and effectively eliminate competition," the association said.

The combined companies would hold 59 percent of the mail-order drug market and 52 percent of the market for specialty drugs, the pharmacists group said. Specialty drugs, often for complex illnesses, are expensive and require special handling.

The proposed merger will face "long and hard" scrutiny from federal antitrust officials, but will ultimately win approval, predicted Adam Fein, an expert in pharmaceutical economics and president of Pembroke Consulting in Philadelphia.

"Pharmacy benefit management is extremely competitive," said Fein.

More than 60 players angle for employers' business, he noted, meaning there will still be plenty of competition after the merger.

Fein believes the big merger will prompt smaller mergers among midsized management firms, as they try to get enough size to demand the same discounts from druggists and drugmakers.

The combined companies will have more power to negotiate discounts from drugmakers and retailers. They will be able to offer better prices to employers, some of which may be passed on to employees, he said.

Right now, there's enough competition for the drug benefits business in St. Louis, said Louise Probst, executive director of the St. Louis Area Business Health Coalition. Her group advises on health issues for St. Louis employers. It also bargains for prescription services for 30 local employers. The last round of bidding brought an "adequate" number of competitors, although the two finalists were Express Scripts and Medco.

Others weren't sure the public would win. The benefit managers "can probably get a better deal from the individual drug companies," said Ron Pollack, executive director at Families USA, which lobbies for health care consumers. "But what if the pharmacy benefit manager pockets that money and consumers never see the benefit?"