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BY BOB HOLT
NEWJERSEYNEWSROOM.COM
After the announcement that Medco Health Solutions was purchased by Express Scripts, the immediate result saw Walgreen stocks falling nearly 2 percent.
Express Scripts fills prescriptions for people who bring doctors' notes into Walgreen stores. But the Wall Street Journal reports the two companies failed to come to an agreement on a new contract and said they would part ways at the end of the year. Walgreen gains nearly $5.3 billion in annual sales from its agreement with Express Scripts.
Investors appear to be worried Walgreen will be left with few other providers of pharmacy-benefit services. CVS Caremark, another option, saw its shares rise nearly four percent Thursday morning.
The Franklin Lakes pharmacy Medco was just purchased by Express Scripts for $29.1 billion in cash and stock. Both companies filled more than 1.7 billion prescriptions last year and earned nearly $110 billion in revenue.
But Medco said to this point of the year it has lost more business than it has booked for 2012. According to myfoxphilly.com, Medco announced that United Health Care will not be renewing their contract that expires on Dec. 31, 2012. So far this year, Medco has lost the contracts of the Federal Employees Health Benefit Program, the California Public Employees' Retirement System, and Universal American.
The merger gives the new expanded company one-third of the drug prescription service in the market. According to the Wall Street Journal, they plan to use their new power to lower the cost of prescription drugs. An Associated Press story on NJ.com reports that the companies say they have found $1 billion in potential cost savings from their merger, or 1 percent of the merged company costs.
Effective July, 2010, Medco became the new contractor for meds. So far, so good, with the exception of lost orders - the fault of USPS, not Medco,
Although this has caused considerable phone time for research - an inconvenience for Medco & me, but their reps are always courteous & try to be helpful.
We hope this merger will not result in a re-occurance of the problems we experienced with Express Scripts!!