Too early to tell how acquisition to affect local Medco operation

NEW YORK -- Express Scripts Inc. said Monday that it completed its
$29.1 billion acquisition of Medco Health Solutions Inc., creating by far the largest pharmacy benefits manager in the country.

The closing came after the Federal Trade Commission voted to close its investigation into the deal, clearing the last hurdle in its path.

The deal creates a pharmacy benefits manager, or PBM, so large that it will handle the prescriptions of about 135 million people, or more than one in three Americans.

An Express Scripts spokesman said it's too early to say how the deal will affect Medco's local operation. Medco has a mail-order center on Annie Oakley Drive in southeast Las Vegas. The company has about 1,350 employees here.

"We are going to take a planful, disciplined approach to evaluate our combined organization and make sure we bring together the best people, processes and programs for the benefit of our clients," Express Scripts spokesman Brian Henry said. "We aren't going to speculate on any specific sites or businesses."

Both companies touted the savings and efficiency that the combination would create, while others in the industry have voiced concerns about competition.

Last week, an alliance of drugstores and community pharmacists filed a federal lawsuit to stop the deal from going through, saying it would create a giant pharmacy benefits manager with too much leverage and market share.

Express Scripts Chairman and CEO George Paz said the combination of the two companies will both lower costs and improve patient care.

Pharmacy benefits managers run prescription drug plans for employers, government agencies and other clients, using their large purchasing power to negotiate lower drug prices. They make money by reducing costs for health plan sponsors and members.

In July, St. Louis-based Express Scripts said it would pay $28.80 in cash and a portion of an Express Scripts shares valued at $42.56 for each share of Franklin Lakes, N.J.-based Medco.

Express Scripts said Monday that it still expects the acquisition to result in cost savings of $1 billion once the two companies are fully integrated. The company also still expects its earnings per share to increase slightly in the first year after closing and then moderately increase once the companies are fully combined.

Both companies become subsidiaries of Express Scripts Holding Co., which will trade on the Nasdaq Global Select Market under the symbol ESRX.

Express Scripts has also made news with its public split with Walgreen Co., the nation's largest drugstore chain. After a contract expired, Walgreen stopped filling prescriptions for Express Scripts, saying it would rather give up the revenue than continue filling unprofitable prescriptions.

Express Scripts shares rose $1.32, or 2.44 percent, Monday to close at $55.50 on the Nasdaq Global Select Market.

Las Vegas Review-Journal writer Jennifer Robison contributed to this report.