Company Snapshot

Financials

The Medco Pharmacy

Advanced Pharmacy Care

Company Snapshot

Medco Health Solutions, Inc. is a leading health care company serving the needs of more than 60 million people.

Medco, the world’s most advanced pharmacy®, provides clinically driven pharmacy services designed to improve the quality of care and lower total health care costs for private and public employers, health plans, labor unions, and government agencies of all sizes, and for individuals served by Medicare Part D Prescription Drug Plans. About one-third of the companies on the Fortune 500 list are Medco clients.

Medco employs approximately 22,000 people nationwide, including 2,650 pharmacists and 650 nurses.

Medco is listed on the New York Stock Exchange (NYSE) under the ticker MHS. Medco was listed on the NYSE on August 19, 2003, in the largest domestic corporate spin-off of that year. Medco is also a member of the S&P 500.

In 2009, Medco captured the No. 1 position in the Health Care: Pharmacy and Other Services sector on Fortune’s World’s Most Admired Companies List for the second consecutive year. Of all companies surveyed globally, Medco ranked No. 5 in innovation and No. 10 in people management. In the health care sector, Medco ranked No. 1 in seven attributes: innovation, people management, use of corporate assets, quality of management, financial soundness, quality of products/services and global competitiveness. It also ranked No. 2 in the categories long-term investment and social responsibility.

Back to top

Financials

Medco’s 2008 net revenues were $51.3 billion; it is ranked number 45 on the Fortune 500 list.

Medco is one of the nation’s largest purchasers of generic drugs. Generic drug utilization among Medco members in 2008 was 64.1 percent, a 4.4 percentage point increase from 2007.

Medco’s high-quality service, advanced technology, cost containment and clinical programs have helped its clients achieve an average drug trend which has consistently been the lowest in our industry.

Medco serves more than 340,000 members through its Medicare PDP, the Medco Medicare Prescription Plan®. More than 69 percent of prescriptions filled by Medco Medicare Prescription Plan members are generic, and approximately 27 percent of prescriptions are filled using the Medco Pharmacy.

Back to top

The Medco Pharmacy

Medco’s mail-order business, which generated $22 billion in 2008 net revenues, is one of the largest pharmacy operations in the United States.

Medco managed 586 million prescriptions in 2008, including 105.8 million prescriptions dispensed at its mail-order pharmacies – significantly more than the number of prescriptions dispensed by the mail-order operations of its two largest PBM competitors.

In 2008, Medco processed approximately 27.5 million prescription orders through www.medco.com, one of the nation’s leading pharmacy benefit management web sites. Medco.com averages almost one million visits per week and handles nearly 40 percent of the company’s refill volume. Its industry leading My Rx Choices® application, which gives members real-time information on the cost of their drugs and potential lower-cost alternatives, was used more than 10 million times in 2008 to help members save on their prescription costs.

More than 20,000 of the new prescriptions Medco manages each week are ePrescriptions.

Medco operates nine mail-order pharmacies and six call center pharmacies. It partners with a nationwide network of approximately 60,000 retail pharmacies.

Medco’s automated pharmacies located in Las Vegas and Willingboro, NJ, together have the capacity to fill more than 2 million prescriptions per week. Medco commenced construction of a third, next-generation automated dispensing pharmacy in Whitestown, Indiana, which is expected to be operational by late 2009.

Medco holds 27 U.S. patents for patient data management, front-end pharmacy technology and automated pharmacy technology.

Medco also operates two pharmacies that dispense diabetes supplies, three Specialty Pharmacy mail-order pharmacies, and 85 specialty branch pharmacies.

In April 2008, Medco acquired a majority interest in Europa Apotheek Venlo B.V., a privately held company based in the Netherlands that provides clinical health care and mail-order pharmacy services in Germany and the Netherlands, and in March 2008, Medco launched a collaboration with Sweden’s government-operated retail pharmacy authority, Apoteket, to develop and test the first automated electronic prescription review system to improve clinical and financial outcomes for Swedish patients and the country’s health care system.

Back to top

Advanced Pharmacy Care

Chronic and complex care represents 96 percent of drug spending and 75 percent of all health care spending. In addition, prescription drugs are the first line of defense in the treatment of more than 80 percent of newly diagnosed chronic/complex illnesses.

Through its unique Medco Therapeutic Resource Centers® and the Accredo Health Group, Medco is creating better models of care for patients with chronic and complex conditions. It is a leader in the emerging field of personalized medicine and in applying evidence-based protocols to elevate the practice of pharmacy and reform America’s health care system.

On August 18, 2005, Medco acquired Accredo Health Group, creating the nation’s largest specialty pharmacy operation, with $8 billion in annualized 2008 sales. Medco and Accredo serve the needs of patients with complex conditions requiring advanced treatment, and they offer a comprehensive portfolio of products, clinical expertise and integrated technology to serve clients and members using specialty pharmaceuticals. Click here for more information about Accredo Health Group.

In 2007, Medco acquired diabetes care leader Liberty Medical, creating the premier provider of diabetes care services with approximately 4 million patients under treatment. Diabetes patients represent 5 percent of the U.S. population and account for 15 percent of overall drug spending.  Click here for more information about Liberty Medical.

More than 1,100 specialist pharmacists work in the Medco Therapeutic Resource Centers – advanced-practice pharmacies organized by specialty, where these pharmacists apply their expertise and take a Six-Sigma approach to improving the safety, effectiveness and affordability of medication treatment for patients with needs in their specialty. Medco offers pharmacists that specialize in one of more than a dozen specialties, including diabetes, cancer, heart disease and asthma.

Medco is committed to delivering on the promise of personalized medicine – learning from a patient's unique genetic code to administer the right drug in the right dose. The company’s Personalized Medicine initiative is dedicated to the research, development and implementation of services to help clients and members understand and leverage the science of pharmacogenomics. As part of this initiative, Medco has several collaborations with highly respected academic centers, as well as self-funded research projects to study this rapidly evolving field of science.

Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Forward-looking statements in this fact sheet should be evaluated together with the risks and uncertainties that affect our business, particularly those disclosed in the Risk Factors section of the Medco’s Annual Report on Form 10–K filed with the Securities and Exchange Commission (SEC File No. 1-31312).

Back to top