About Medco Health Solutions

Express Scripts Holding knows that its customers like their medicine delivered quickly. The company administers more than 1.4 billion prescription drug benefits of 83 million health plan members in the US and Canada. Members have access to a network of more than 68,000 retail pharmacies, as well as the company's own mail-order pharmacies. On behalf of its insurer clients, Express Scripts processes claims for prescriptions, designs drug benefit plans, and offers such services as specialty drug delivery, disease management programs, and consumer drug data analysis. Health insurance giant Cigna is buying Express Scripts for $52 billion.

Change in Company Type

In 2018, Express Scripts agreed to be acquired by insurer Cigna for $52 billion. This deal is one of a few multi-billion-dollar transactions struck in recent months as consolidation in the health care industry runs rampant. Express Scripts and Cigna have both stated that the combination will help increase efficiency, which should translate to lower prices for consumers.


Express Scripts provides services in four areas: benefit choices, drug choices, pharmacy choices, and health choices. Its Health Decision Science method combines behavioral science, clinical specialization, and actionable data to help customers make the best choices. Additionally, the firm's Therapeutic Resource Center provides access to specialist pharmacies and nurses to fill in gaps in health care.

The company operates in two segments: PBM (pharmacy benefit management, which accounts for nearly all revenues) and Other Business Operations. The PBM segment covers an array of benefits services including personalized medicine, case coordination, specialized pharmacy care, home delivery, retail network pharmacy administration, benefit design consultation, and public exchange offerings such as Medicare and Medicaid. The Other Business Operations segment includes subsidiaries CuraScript Specialty Distribution (which distributes specialty medicines to treat rare and orphan diseases directly to providers and hospitals in the US) and CareCore National Group (dba eviCore, which provides medical benefit management services).

The PBM acquires pharmaceuticals either directly from manufacturers or through wholesalers. Generics are typically acquired directly from the manufacturer.

Geographic Reach

Express Scripts has nearly 90 owned or leased PBM facilities throughout the US and seven owned or leased PBM facilities in Canada. Of these, more than five domestic facilities are processing pharmacies for home delivery operations and five are mail-order dispensing pharmacies (located in Arizona, Indiana, Missouri, New Jersey, and Ohio). The company also has roughly 35 specialty branch pharmacies, some 10 specialty home delivery pharmacies, and five contact centers in the US.

The Other Business Operations segment owns or leases about 15 locations throughout the US.

Sales and Marketing

In addition to health care providers, clinics, and hospitals, Express Scripts' clients include HMOs and other health insurers, self-insured businesses, managed care organizations, third-party administrators, employers, workers' compensation plans, government health programs, and union benefit plans throughout North America. The company's top two clients are Anthem (nearly 20% of total revenues) and the Department of Defense (more than 10%). In all, Express Scripts serves some 3,000 customers.

Financial Performance

Express Scripts' revenues have remained fairly steady at around $100 billion for the past few years. In 2017 revenue fell less than 1% to $100.1 billion as network revenues and other PBM revenues dropped; this was partially offset by growth in home delivery and specialty revenues. In terms of operating subsidiaries, Express Scripts had increased sales while Medco Health Solutions saw a decline.

Although revenue has remained relatively static, net income has shown strong growth for the past five years. It rose 33% to $4.5 billion in 2017 as cost of revenues and selling, general, and administrative expenses declined. The company also set aside lower provisions for income taxes that year.

Cash flow from operations has been rising as of late; it rose 9% to $5.4 billion in 2017. Positive changes in accounts receivable and claims and rebates payable helped boost cash flow.


Express Scripts and the pharmacy benefit management (PBM) industry have grown rapidly in today's complex health care system. PBMs strive to save money for their customers by negotiating good deals for prescription drugs with networks of retail pharmacies (their primary source of revenue), as well as by encouraging the use of cheaper generic drugs and home-delivered medications. Express Scripts also saves clients' money by offering disease and medication management programs to help members avoid unnecessary medical expenses.

The PBM industry has also undergone rapid consolidation, a factor that has allowed Express Scripts to grow its profits exponentially in recent years. Although it hasn't been extremely acquisitive as of late, Express Scripts historically expanded its PBM operations through smaller purchases. It has also grown through organic measures, such as the addition of new customer contracts, as well as the extension of existing contracts to add new services. Additionally, the company has been investing some $75 million in the improvement of two new data centers in Chicago and Piscataway, New Jersey.

Another trend in health care consolidation revolves around vertical integration. As such, a number of companies have entered or plan to enter new industries to touch more points on the supply chain. As one example, in 2018, Express Scripts agreed to be acquired by health insurer Cigna for a whopping $52 billion. That deal's announcement followed news of another game-changing purchase: the pending acquisition of insurance company Aetna by retailer CVS.

Express Scripts has been selling a higher percentage of generic medications in recent years. Although sales of less-expensive generics can lower Express Scripts' overall revenue, the company's profit margins have ultimately increased because of lower ingredient prices. The growing demand for lower-cost alternatives has driven the company to seek new ways to serve customers. Targeting consumers who are either uninsured or who pay high out-of-pocket costs, the firm launched the Inside Rx partnership with pricing comparison service GoodRx in 2017. The program offers an average savings of 34% off of drugs' typical cash prices. Also in 2017, the company agreed to participate in group purchasing organization (GPO) Walgreens Boots Alliance Development (WBAD). That move allowed Express Scripts to reduce prices of generic prescriptions for patients.

Specialty pharmacy subsidiary CuraScript, part of the Other Business Operations segment, is experiencing higher consumer demand. Through its primary operating unit, CuraScript Specialty Distribution (or CuraScript SD), the subsidiary provides home distribution of specialty prescriptions (primarily injectable biotech drugs that require special packaging and handling); the unit also delivers to doctors' offices and other health care providers.

In 2017 Express Scripts signed a new contract with its largest customer, insurance giant Anthem. The insurer brings in more than 15% of Express Scripts' total revenues. However, that contract expires in 2019 and Anthem plans to start its own drug plan. (Anthem has accused Express Scripts of overcharging by billions of dollars.) By Anthem establishing its new business, IngenioRx, Express Scripts will lose a major customer AND face another competitor.

Mergers and Acquisitions

In late 2017 Express Scripts bought medical benefit management firm eviCore for $3.6 billion. eviCore helps health plans and commercial customers secure better health care costs; it manages medical benefits for 100 million individuals. The acquisition provided Express Scripts with entry into the medical benefit management sector, a growing market.

Company Background

Express Scripts merged with rival Medco Health Solutions in 2012, creating the largest pharmacy benefits management (PBM) company in North America.

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Medco Health Solutions

5701 E Hillsborough Ave Ste 1300
Tampa, FL 33610-5429
Phone: 1 (813) 317-2000
Fax: 1 (813) 317-2195


  • Employer Type: Public
  • Senior Manager: Cathy Bruno
  • Director: Eric McPherson
  • Manager Finance Support: Lauren Woodard
  • Employees: 864

Major Office Locations

  • Tampa, FL