Decide Assignment On Merck's Acquisition Of Medco

You Decide Assignment on
Merck’s Acquisition of Medco

By
Zankhana Desai

FIN 561- Mergers and Acquisition
Professor: Yvan Nezerwe
Keller Graduate School of Management

Table of Contents
C5.1.0 Executive Summary…………………………………………….3
C5.1.1 The Major Driving Force of the Merck-Medco Acquisition.. 3-4
C5.1.2 The Role of PBM Companies……………………………….. 4-5
C5.1.3 Utilization of Medco’s Database……………………………. 5-6
C5.1.4 Competitive Reactions to Merck- Medco Acquisition ……. 6
C5.1.5 SWOT Analysis……………………………………………..6-8
C5.1.6 Impact on Marketing and Sales………………………….. 8-9
C5.1.7 Impact on Operational……………………………………..9- 10
C5.1.8 Impact on Financial Consideration………………………...10 C5.1.9 Benefits of the Acquisitions……………………………… 11 C5.1.10 Recommendations……………………………………… 12
References…………………………………………………… 13

C5.1.0 Executive Summary
The purpose of this paper is to present the
The manufacturer like Merck-Medco, Lilly-PCS were concerned about losing access to their industries to PBM. PBMs are companies that administer drug benefit programs for employers and health insurance carriers. Their contracts are directly to managed care organizations, self-insured employers, insurance companies, Medicare, and almost all Federal and State government health benefits plans. To make the benefit plan more affordable PBM lowered their claims processing fees and also offered rebate retention. PBM also processed prescription drug claims, reviewed prescriptions, offered generic and branded medicines through mail services as well. Hence, due to PBM’s efficiency of delivering and processing the drug cut overall cost of health care benefits, the manufacturer industry got a big hit in their business. So, in the early 1990S, a large growth of managed care changed the health care industry that also had a heavy impact on