FINA4310 - Project 1 MHS

FINA4310 - Project 1 MHS - I. Cover Page Finance 4310...

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I. Cover Page Finance 4310 Valuation and Financial Decisions Section 001 Jordan McGregor February 17, 2010 Firm Name: Medco Health Solutions Inc Ticker Symbol: MHS II. Full Overview
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“The following was obtained from the Hoover’s database provided by the University of North Texas Willis Library, February 15, 2010.” Administering some 580 million prescriptions each year, Medco Health Solutions is the country's top pharmacy benefits management company and, through its Accredo Health unit, its top specialty pharmacy as well. The company assists health plans in managing drug costs by designing drug formularies, negotiating discounts with pharmaceutical companies, and processing claims. Members may fill their prescriptions through a network of about 60,000 pharmacies, a mail-order program, or the company's Internet pharmacy. Medco Health Solutions manages drug benefits for clients that include unions, corporations, HMOs, insurance companies, and federal employees. Customer cost containment is the cornerstone of the company's business strategy. Medco Health Solutions is able to control costs through the use of technology to process prescription claims, automation to fill and distribute prescriptions, and volume purchasing of pharmaceuticals. It also encourages the use of its mail order pharmacies and of generic equivalents in place of more expensive brand name drugs. Medco's mail order business is a big part of this cost reduction strategy. With nine mail order pharmacies scattered across the country, the company dispenses more than 100 million prescriptions a year. It uses this scale to get better deals from suppliers and to force stricter compliance with health plan formularies. Within its mail order pharmacies, Medco has instituted what it calls Medco Therapeutic Resource Centers, which are specialized groups of pharmacists who are focused on certain chronic or complex diseases. The company's $1.5 billion acquisition in 2007 of PolyMedica , a mail-order distributor of blood- glucose monitors to diabetes patients, strengthened its Therapeutic Resource Center model, giving it resources dedicated to diabetes patients. Under a previous agreement, Medco had been supplying diabetes drugs to PolyMedica's patients. Medco continues to operate the diabetes supply business under PolyMedica's former Liberty Medical brand. The company further enhanced the Liberty division when it bought the diabetes distribution assets of subsidiary Access Diabetic Supply for $63 million in 2009. Another key component of the company's strategy is the growth of Accredo Health, which dispenses sensitive biotechnology drugs, usually injectable or infusion drugs, to patients with serious diseases such as cancer. Accredo delivers medications and related supplies either to patient homes or clinical sites from three main distribution centers in Tennessee and Pennsylvania. Medco grew its Accredo unit in 2007 with the acquisition of
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This note was uploaded on 02/24/2010 for the course FINA 4310 taught by Professor Impson during the Spring '10 term at North Texas.

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FINA4310 - Project 1 MHS - I. Cover Page Finance 4310...

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