Medco Chairman and CEO David Snow Addresses Shareholders, Highlighting Another Year of Growth, Innovation and Substantial Client Savings - With More to Come

FRANKLIN LAKES, N.J., May 24, 2011 /PRNewswire/ -- Medco Chairman and CEO David B. Snow Jr. today recapped a string of accomplishments in 2010 for attendees at the company's annual shareholders' meeting and offered a vision for a future in which Medco plays a pivotal role in the success of healthcare reform. "There are moments in history when multiple factors align to fuel positive change," he said. "We're living in one of those moments; Medco is seizing this opportunity for its clients and patients as we advance high-quality healthcare through innovation."

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Snow brought shareholders a vivid sense of the abundant opportunities that lie ahead for Medco and its clients in all areas of its business, leading with the potential to reap unprecedented savings from a historical wave of first-time generic drugs beginning late this year. Snow highlighted Medco's ability to leverage its wired pharmacy to drive even greater client savings and clinical benefits and utilize its vast prescription drug and medical databases to help patients and physicians close 2.3 million gaps in care in 2010 through its robust set of sophisticated clinical tools designed to reduce overall healthcare costs.

The Medco Medicare Prescription Drug Plan (PDP)® is the first and only national plan to earn a 5-Star overall rating from the Center for Medicare and Medicaid Services – a designation for providing members with the highest overall service quality and performance. The company also expanded its comparative effectiveness and outcomes research capabilities with the acquisition of United BioSource Corporation, and its expanded genomic research and health management capabilities through the Medco Research Institute and its acquisition of DNA Direct, initiatives designed to drive further value to clients and the healthcare system.

"By any measure, 2010 was a year of growth that delivered solid returns to investors," said Snow. "But investors also recognize that Medco's vision is long-term. We bring game-changing, system-transforming capabilities to the equation. Since becoming a public company in 2003 we have redefined the modern pharmacy benefit manager (PBM), and we are now executing on an ambitious, expansive and meticulously detailed plan as we bring to life the concept of 'making medicine smarter' through the next decade."

In addition to delivering nearly $3.7 billion in generic savings to clients and members, the company's 2010 financial results strongly affirmed the effectiveness of Medco's strategy and the agility and responsiveness of its operations. In 2010:

• GAAP diluted EPS increased 21.1 percent to a record $3.16 from $2.61 in 2009;
• Total net revenues increased 10.3 percent to a record of $66.0 billion;
• Gross margins increased 7.7 percent to a record $4.34 billion;
• EBITDA increased 8.1 percent to a record $2.97 billion, yielding a full-year record of $3.11 per adjusted prescription;

Other records Medco logged in 2010 included: a mail-order prescription volume increase of 6.5 percent to 109.8 million (with generic volumes increasing 13.4 percent to a record 67.6 million); a generic dispensing rate increase of 3.5 percentage points to a full-year 71.0 percent; and an increase in specialty pharmacy revenues of 19.1 percent to over $11.3 billion – all delivering significant savings to Medco's clients and patients.

The company's client-retention rates and new sales also spoke clearly to the value of its services. Annualized new-named and net-new sales for 2010 each reached $5.3 billion, and the client retention rate, as measured by drug spend, exceeded 99 percent.

"Medco is a force for long-term, positive change in healthcare," concluded Snow. "Whether you gauge that by client savings, healthcare system effectiveness or shareholder value, it adds up to our ultimate aim and our noble cause – improved health for patients and lower overall costs for payors."

Voting Results

According to preliminary voting results released at the meeting, Medco shareholders re-elected nine members to its Board of Directors. Shareholders also ratified the appointment of PricewaterhouseCoopers LLP as the company's independent auditors for fiscal year 2011; approved amendments to the Company's Certificate of Incorporation; approved the Amended and Restated Stock Incentive Plan; approved, on an advisory basis, a proposal regarding the compensation of the Company's named executive officers; and approved, on an advisory basis, the holding of a shareholder advisory vote annually on the compensation of the Company's named executive officers. Shareholders also voted against a shareholder proposal regarding executive equity holding requirements.

Webcast Information

A replay of the webcast of Medco's Annual Meeting of Shareholders is available through the Investor Relations section on Medco's Web site, www.medcohealth.com/investor. Slides associated with the presentation made during the meeting will also be available on the site.

RealPlayer or Windows Media Player is required to listen to the webcast. Free downloads of both players are available at the webcast site. The webcast will be available for replay for one year following the presentation.

About Medco

Medco Health Solutions, Inc. (NYSE: MHS) is pioneering the world's most advanced pharmacy® and its clinical research and innovations are part of Medco making medicine smarter™ for approximately 65 million members.

With more than 20,000 employees worldwide dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2010 revenues of $66 billion, Medco ranks 34th on the 2011 Fortune 500 list and is named among the world's most innovative, most admired and most trustworthy companies.

For more information, go to http://www.medcohealth.com.

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

SOURCE Medco Health Solutions, Inc.