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Medco deal loses its luster

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State leaders hailed the 2007 decision by Medco Health Solutions Inc. to add 1,300 pharmacy jobs in Whitestown by 2012. But the deal isn’t panning out as promised.

New Jersey-based Medco has hired just 430 workers in Whitestown so far, and its business trends suggest the company is shrinking, not growing. The pharmacy benefits manager has lost $3.5 billion in contracts since March and could lose another $11 billion contract with UnitedHealth Group, its largest client, next year.

Minnesota-based UnitedHealth is reviewing its contract with Medco and leaning toward moving the work in-house, Bloomberg News reported, citing Ana Gupte, an analyst at Sanford C. Bernstein & Co. Combined, the contracts lost or in limbo account for 29 percent of Medco’s current business.

That could force Medco to make an acquisition or diversify out of pharmacy-benefit management to replace the revenue. Last year the company pulled in nearly $66 billion, generating a profit of $1.4 billion.

Medco operates a $140 million automated pharmacy and distribution center in Whitestown in Boone County. In 2009, it raised its employment projections to more than 1,400, paying salaries that range from $40,000 to $100,000. The company studies drug data, genetic testing and medical-claims data at the facility.

"This is a huge jewel in the crown of our state," Gov. Mitch Daniels said when announcing Medco’s expansion in Indiana in 2007. To lure Medco, the state offered tax credits of $18.3 million and training grants of $450,000. It later promised another $3.6 million in incentives when the company raised its employment projections.

Work-force availability was a top issue for Medco as it chose the Indianapolis area over Louisville, Ky., and 20 other cities.

The presence of Butler University and Purdue University pharmacy graduates was a big deal, as nearly a third of the jobs will require pharmacy backgrounds. Purdue and Indiana University also can offer a stream of graduates for the information-technology and other positions the facility will create, executives said.

Medco also liked the Indianapolis area because of its central location and because being near FedEx's hub at Indianapolis International Airport will save time and money in shipping.

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  • working class tied to whipping post again
    Indiana toll road sale (99 yr deal) and the billions of dollars that evaporated seemingly overnight. Indiana's food stamp/welfare system sale to IBM-subsidiary which eventually was handed back to the taxpayers for a projected loss into the billions of dollars. Numerous financial and business deals that were promised to the working class of Indiana/taxpayers that have cost taxpayers into the hundreds of millions of dollars but either never materialized or never lived up to their promised expectations of employment and financial return of taxpayer investment i.e. Medco of Zionsville as well the Police car manufacturing facility in Connersville which cost taxpayers of Indiana into the Hundreds of millions if not Billions of dollars in incentives and lost salary as well tax revenue. These are only a few of the many promises that have been broken and/or were never intended to be delivered. The reported 2.3 billion dollars of debt that was ordered hidden from the public/taxpayers of Indiana through the illegal destruction of documentation of such debt and the paper trail that lead back to the responsible parties who profited by it. The International Law Firm who's Headquarters are located in Indianapolis that profited tens of millions if not hundreds of millons of dollars from the taxpayers and duped investors of Indiana (Baker and Daniels Law Firm, LLP). It's not a coincidence that Indiana Governor Mitch Daniels was/is the same "Daniels" in Baker and Daniels Law Firm who was responsible in whole and/or in part to all the introduction of legislation and/or executive actions which lead to all the aboveforementioned. I call for a complete and thorough investigation(s) and inevitable criminal prosecution(s) of all parties both private and public not to exclude the Indiana Governor himself. I would ask Indiana Governor Mitch Daniels to do his Constitutional duty and spear-head such investigation(s) before he leaves office so that his tenure as Indiana Governor is not "stained" with the same legacy he had as Chief Financial Officer of the White House for then/now disgraced United States President George Hubert Walker Bush and his administration.

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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

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