Pharmacy benefits manager Medco Health Solutions Inc. said today that new clients and increased use of higher-margin generic drugs boosted its profit in the first quarter, with results exceeding Wall Street’s expectations.
Medco, based in Franklin Lakes, N.J., is building a $140 million automated pharmacy in Boone County that is expected to employ 1,300 people by 2012.
Medco’s profit had been boosted in recent quarters as more people tried to save money by filling their prescriptions through the mail instead of going to the drugstore. But, in the first quarter, mail-order prescriptions fell and retail prescriptions were higher than the company expected, climbing almost 18 percent, to 149.4 million.
The company credited the gains to increased prices on brand-name drugs and contracts with new clients.
Medco said its profit rose 8 percent, to $291 million, or 58 cents per share. That’s up from $270.2 million, or 50 cents per share, on $12.96 billion in revenue a year ago.
Excluding one-time items, earnings were 63 cents per share. Revenue grew 14 percent, to $14.83 billion.
Analysts expected 62 cents per share and $13.71 billion, according to Thomson Reuters.
Medco said 25.7 million prescriptions were filled over the mail, a decrease of 3.4 percent from last year. Specialty pharmacy revenue climbed 21 percent, to $2.3 billion. Medco says adjusted prescriptions rose more than 9 percent, and 66.8 percent of prescriptions were for low-cost generic drugs – up from 63.3 percent a year ago. Medco profit margins are typically higher on generic drugs.