Medco Health Shares Slammed On News of Merger

Shares of pharmacy benefits manager Medco Health have fallen over 9 percent in mid-afternoon trading, on news that a megamerger with rival Express Scripts might actually receive regulatory approval.


According to a Reuters report, U.S. antitrust regulators doubt they have enough evidence to stop Express Scripts from purchasing Medco Health Solutions for $29 billion.

The deal, announced in July, would combine two of the three largest pharmacy benefits managers (PBMs), who are responsible for handling prescription drug benefits for large, nationwide companies. The third is CVS Caremark. A Medco-Express Scripts merger would create an industry leader with nearly one-third of the market.

Reuters also reports that, despite being short enough on evidence to block the merger in court, key Federal Trade Commission members believe it should be stopped.

The regulators' decision on whether or not to file an anti-trust lawsuit is expected by the end of February or early in March.