A site put forward by Indianapolis near the downtown canal has been passed over because it wasn't large enough, according to a source familiar with the company. Other locations under consideration are in Greenwood, and Boone and Hendricks counties.
The company wants at least 15 acres.
Gov. Mitch Daniels has scheduled a news conference Monday morning to announce creation of a "substantial number of new jobs" in central Indiana.
Medco is interested in starting with 500 to 600 jobs and building to 1,000 to 2,000 jobs, said the source, who spoke on condition of anonymity.
Medco dropped Louisville from consideration at about the same time it turned down Indianapolis.