Express Scripts to Acquire Medco (Yes, really)

At 6:00 AM this morning, Express Scripts (NASDAQ:ESRX) and Medco Health Solutions (NYSE:MHS) announced a merger agreement. Here is the official press release: Express Scripts and Medco Health Solutions Sign Definitive Merger Agreement; Medco Shareholders to Receive $29.1 Billion

No, this is NOT one of my April Fool's jokes.

The companies have set up a website with details (www.BetterRxCare.com) and published a fact sheet with details. There is a conference call scheduled for 8:30 AM EST this morning. Click here to listen.

I estimate that the two companies processed almost 40% of prescriptions in 2010. (See chart below.) I'll follow-up next week as more details emerge. In the meantime, expect the pharmacy industry and possibly pharma manufacturers to protest this combination once the shock wears off.

Here's my estimate of retail and mail prescription claims processed in 2010. Obviously, 2012/3 will look much different given Medco's loss of business this year.

Nope, I didn't see this particular combination coming despite my comments in PBM Consolidation Ahead.

Medco's loss of the UnitedHealthcare (NYSE:UNH) business appears to be an obvious catalyst.