Medco not interested in Walgreen PBM unit

By Reuters
Posted Nov. 19, 2010 at 1:43 p.m.

Medco Health Solutions Inc. would not be interested in buying Walgreen Co.’s pharmacy benefit unit because it is too small, Medco’s chief executive said on Friday.

Walgreen has hired Bank of America to sell its pharmacy benefits business, a source close to the situation told Reuters last month.

“It’s not large enough for us to get distracted from other very large things we’re working on,” Medco CEO David Snow told Reuters after the U.S. pharmacy benefit manager’s analyst day in New York, in which it detailed its long-term growth plans.

Walgreen’s PBM business processes roughly 90 million adjusted claims a year, well below the 700 million to 900 million processed by its rivals, according to JP Morgan analyst Lisa Gill.

Earlier on Friday, Snow told the analyst meeting that Medco was open to possible deals for other pharmacy benefit units.

“We’re open to a PBM bolt-on, but we’re an organic growth company,” Snow told the meeting.

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