Medco Health Solutions Inc. reported a 12 percent jump in fourth-quarter earnings Tuesday, but the first question analysts had for company executives on a conference call concerned the pending acquisition by Express Scripts Inc.
Express Scripts, a Medco competitor, announced in July a $29.1 billion deal to buy Medco, a combination that would create the largest U.S. pharmacy benefits manager. Shareholders from both companies have approved the deal, and Medco said Tuesday it remains confident the acquisition will close in the first half of this year.
Pharmacy benefits managers, or PBMs, process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies, acting as middlemen between employers offering prescription drug benefits and drugmakers.
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During the call, an analyst noted that PBMs are heading into the "meat" of their selling season, the time of year when employers renew contracts or decide on new ones. He wondered how Medco was handling questions on the deal.
Medco Chairman and CEO David B. Snow Jr. responded.
QUESTION: What are clients asking and how do you respond on the merger?
RESPONSE: All I can tell you is that we are having … a very strong sales season, and clearly the people who are making these decisions are fully cognizant of our intent to merge with Express Scripts. I think what they see is an opportunity to get involved with a company that is phenomenal at service and creates an enormous value proposition, and they also understand that the value proposition will only improve post-merger.
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