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Medco Health Solutions, Inc. (NYSE:MHS)

Q1 2010 Earnings Call Transcript

April 28, 2010 8:30 am ET

Executives

Valerie Hartle – VP, IR

David Snow – Chairman and CEO

Richard Rubino – SVP, Finance and CFO

Mary Daschner – Group President, Retiree Solutions

Timothy Wentworth – Group President, Employer Accounts

Analysts

Ross Muken – Deutsche Bank

Larry Marsh – Barclays Capital

Lisa Gill – JPMorgan

Ricky Goldwasser – Morgan Stanley

Robert Willoughby – Banc of America/Merrill Lynch

Steven Valiquette – UBS

Tom Gallucci – Lazard

Randall Stanicky – Goldman Sachs

Ann Hynes – Caris

Helene Wolk – Sanford Bernstein

Operator

Good morning, my name is Brooke and I’ll be your conference operator today. At this time, I would like to welcome everyone to the MedcoHealth Solutions first quarter 2010 earnings conference call. (Operator instructions)

I would now like to turn the call over to Valerie Haertel, VP of Investor Relations. Thank you Ms. Haertel. You may begin your conference.

Valerie Haertel

Thank you, Brooke. Good morning and thank you for joining us on Medco’s first quarter 2010 earnings conference call. With me today as speakers are Chairman and Chief Executive Officer, Dave Snow, our Chief Financial Officer, Rich Rubino.

Also joining us for our question-and-answer session are Kenny Klepper, President and Chief Operating Officer, Tom Moriarty, General Counsel, Secretary and Senior Vice President of Pharmaceutical Strategies and Solutions, Steve Fitzpatrick, the President of Accredo Health Group and Mary Daschner President of Retiree Solutions Group.

During the course of this call we will make forward-looking statements and that term is defined in Private Securities Litigation Reform Act of 1995. No forward-looking statement can be guaranteed and actual results may differ materially from those suggested. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements made on this call should be evaluated together with the risk and uncertainties that affect our business, particularly those disclosed in our SEC filing. Copies of Medco’s filings are available from the SEC, the Medco Investor Relations department or the Medco website.

Medco intends to use the Investor Relations section of its website as means of disclosing material, non-public information and for complying with its disclosure obligations under SEC Regulation FD.

The copyrights for the contents of this discussion and the written materials used on this earnings call are owned by MedcoHealth Solutions, Inc. 2010. Slides to accompany our presentation which detail our financial and operating results and the guidance discussed on this call are currently available in the events section of the investor relations site on medcohealth.com. Additionally, please note that our 10-Q will be filed after the close of the market today.

At this time I would like to turn the call over to Dave Snow. Dave?

David Snow

Thank you Valerie and thanks to all of you for joining us this morning. Today we are reporting strong first quarter 2010 earnings growth on top of our record breaking 2009 performance.

GAAP diluted earnings per share reached $0.57 representing 15.5% growth over first quarter 2009. Our diluted earnings per share excluding the amortization of intangible assets from our 2003 spin-off reached $0.73, a 15.9% increase over first quarter 2009. Our continued strong net new sales growth drove our first quarter revenues to $16.3 billion.

This is a new record representing a 10% growth rate over first quarter 2009. Our 2010 selling season continues to be strong with $4.4 billion in annualized new name sales up from our previously reported $4.3 billion.

Our 2010 net new sales now stand at $4.3 billion, up from our previously reported $4.2 billion. We have experienced sales success across all of our market groups, as our clinically focused business model continues to resonate well in the marketplace. Current and prospective customers recognize and appreciate or differentiate clinical approach as we make medicines smarter through our therapeutic resource centers and personalized medicine initiatives improving our comps while driving down total healthcare cost.

We have completed almost 90% of our planned 2010 client renewals representing approximately $15 billion in drug spend. All accounts with drug spends over $500 million have been renewed and 2010 client retention rate remains at a record surpassing 99%. The business environment remains competitive and while we have seen instances of aggressive pricing, the marketplace is valuing our product and service model in a way it allows us to continue winning and retaining business while maintaining our disciplined market approach.

To that point, although it is still early in the 2011 selling season, I am pleased to report that we are new cost to-date for 2011. We will provide further details on the 2011 selling season on our second quarter as has been our normal practice. Our personalized medicine initiatives continued generate increased interest most recently catalyzed by the important work on research study findings that Dr. Rob Epstein and his team recently published. In this study we demonstrated that genetic testing before prescribing a specific dose of Warfarin reduces hospitalization rates more than 30%.

A clear example of how the use of smarter medicine can take the waste out of the healthcare system and more importantly save lives. These pharmacogenomics initiatives are now further augmented by the additional capabilities we are able to offer clients through our acquisition in the first quarter of DNA Direct. In total, our personalized medicine programs have over 220 clients enrolled covering more than 10 million lives up from nearly 8 million lives we reported last quarter.

We expect to continue to advance smarter medicines and have approximately 20 new pharmacogenomic research initiatives underway or in the pipeline for 2010. We also have a significant number of therapeutic resource center research projects underway to further advance our specialized practice of pharmacy for the benefit of our clients and members.

Looking at other key performance metrics, our total prescriptions adjusted for the difference in days supply between mail order and retail for first quarter 2010 increased from the same quarter last year by 5.8% to a record 239.2 million. Mail script volume for the first quarter 2010 was quite strong at a record 27.2 million mail order prescription, a 5.8% increase from first quarter 2009. Importantly, brand name prescription volume at mail remains steady, while our generic prescription volume at mail grew over 10% as members continued to embrace generics for additional cost savings.

Our adjusted mail-order penetration rate was consistent at 33.9% compared to 34% in first quarter 2009, as increased mail-order utilization in our existing book of business was slightly offset by January 1, 2010, new business wins. However, these new business wins which we originally estimated would yield 25% mail-order penetration rate are exceeding our expectations with mail-order penetration rates of 31%. As a result, we remain confident in our full year mail-order volume guidance of 107 million to 109 million prescriptions up from the 103 million prescriptions we dispensed in 2009.

In addition to strong mail-order volume this quarter, we also continued to see strong retail volume. Retail prescriptions grew by 5.8% to a record 158.1 million. This quarter our generic dispensing rate increased 2.9 percentage points to a record 69.7%, compared to 66.8% for first quarter of 2009. The year-over-year improvement in our overall generic dispensing rate drove incremental savings to our clients and members of approximately $690 million for the quarter, as members continued to benefit from this equally effective and much less expensive alternative.

Turning to our Specialty Pharmacy segment, Accredo posted record first quarter result. Net revenues reached a record $2.7 billion representing 17.1% growth over the $2.3 billion in the first quarter of 2009.

Operating income grew by a strong 16.6% to a record $106.5 million for the quarter. We are again reaffirming 2010 diluted GAAP earnings per share guidance of $3.05 to $3.15 representing strong growth of 17% to 21% over 2009. Excluding the amortization of intangible assets from the 2003 spin-off we expect diluted earnings per share to be in the range of $3.28 to $3.38 for a growth rate of 16% to 19%.

Now I would like to take a moment to comment on the national healthcare reform legislation which has been signed into law since our last earnings call and discuss what it means to Medco.

As you know, we have spent a great deal of time working with our nations’ lawmakers to demonstrate how managing prescription drug improves clinical outcomes and drive down total healthcare cost.

The fact that pharmacy is wired in our country enables us to close the gaps in care associated with $350 billion of weight in our healthcare system each and every year, tied to the poor management of chronic and complex disease.

For healthcare reform to be comprehensive, we must as a nation mandate improvements in three key areas access, cost and quality. The new reform legislation tackles a significant portion of the access problem delivering health insurance benefits to another 32 million Americans. This is positive for Medco, since it is likely that a reasonable share of these newly insured individuals will become Medco members.

While the new reform legislation is less prescriptive on the cost and quality dimensions of reform there are specific provisions that encourage and fund experiments through innovation, focus, demonstrations around our nations’ cost and quality problems. The urgent need for real cost and quality solutions that drive better value for every dollar spent will be amplified over the next few years as policy makers better understand the inflationary nature of the reform bill as it currently stand. Most recently HHS confirmed this fact to the nation and I believe the momentum will continue to grow from here.

The legislation includes provisions for significant government investments in comparative effect of these research initiatives, a space where the Medco Research Institute has the experience and expertise today. Additionally, the new legislation provides for an office of innovation under the offices of CMF that will create opportunities for Medco to participate in improving the cost and quality equations in Medicare and Medicaid leveraging our proprietary capability. We look forward to these and other opportunities to work with government agencies to help America drive waste out of the system while improving the quality of care and the clinical outcomes we achieve as a nation.

Making medicines smarter is a universal need that serves commercial and government clients extremely well. Over the next several years, the government will be in the implementation phase of this new legislation we intend to pursue these opportunities vigorously. It is also important to point out that the legislation does create a pathway for bio-similars, something we have argued in favor of for several years. Although not ideal, we believe the bio-similars provision will ultimately save clients and members money and also contribute to Medco’s earnings overtime.

On the issue of transparency, the new legislation is acceptable for Medco. We have what has been acknowledged as the most transparent model in our industry and the legislation articulates the approach that Medco already uses across its business. One issue that we will monitor closely is the government’s decision to eliminate the tax free nature of the retiree drug subsidy for employers who cover Medicare eligible retirees under their health benefits. Between now and 2013, some clients may choose to reevaluate coverage of their retirees due to the elimination of the tax free nature of the subsidy.

Many Fortune 500 companies with liabilities tied to the forward-looking value of the benefit and associated subsidies must record accounting charges now to reflect the impact of the change in subsidy tax statuses as a result of enacted law, even though the tax status doesn’t change until 2013. As a result, clients will be evaluating ways to provide a level of healthcare that not only serves the interest of their retiree population but also their shareholders and other constituents.

While it is difficult to predict how our clients will respond to these changes that are not yet fully defined or understood, we remain confident that we are well prepared to serve our clients needs no matter what avenue they may pursue in managing their retiree health benefits going forward. We offer many options for the administration of employer sponsored group, retiree prescription drug benefit through the administration of the retiree drug subsidy and through employer group waiver plan product often referred to as AgVet product which are offered on Medco’s PDP platform.

When we built our PDP platform in preparation for 2006, we stated that it would become a chasse upon which many new retiree group products would be developed. That is what we have done and needs new, creative and flexible AgVet products will be used extensively to retain our existing lives and win new customers. To provide you with some background, Medco is the largest and most experience provider in the AgVet market and has become recognized as an industry leader for this product.

We believe that we have the broadest product portfolio in the industry and we provide a very high level of operational excellences within our Medicare product base.

As approved point to our Medicare capabilities, our PDP has achieved a rating of 4.5 out of our 5 stars on the CMS quality star ratings, which is based on 19 dimensions of quality across all Part D plans compared to the industry average of 3.2 stars. With this experience and high level of operational excellence in executing costs effective retiree pharmacy benefit plans; we have a significant opportunity to continue to drive additional growth in our AgVet business from increased convergence to this innovative palatable solution.

Let me briefly explain why Medco’s AgVet product is particular are and will increasingly become so attractive to employers. An AgVet allows an employer to customize a benefit design and retains sponsorships of the retiree benefit at a lower cost and with limited member disruption. It provides greater flexibility than the retiree drug subsidy in benefit design, member cost sharing, and premium contribution.

An AgVet requires a benefit only as rich as the standard Part D benefit and employers can charge up to 100% of the premiums to the beneficiary if so desires, representing a significant cost saving opportunities to plan sponsor. And finally, the CMS direct subsidies provided to PDP plans will increase over time as the donut hole closes and this subsidy will increase at a faster rate than the RDS subsidy.

The final point I would like to make on the retiree drug subsidy is that for those clients who elect not to continue taking the retiree drug subsidy or not to enroll in an AgVet. We have the ability to continue to cover these members by recapturing them through two other product sets. The first is through our health plan partners at the pharmacy engine inside their MA-PD, SNP and PDP individual Medicare Part D products. All of which provide us with substantial national coverage and the second is through our own national PDP which is growing at a record pace. Both of these options provide Medco with what we believe is a broad safety net.

One last and somewhat less important dynamic to be aware of relative to the legislation is the potential cost associated with software development and profits reengineering that may be required to deploy administrative changes that comply with the new requirements under the reform legislation. We will learn more about the real business implications once the rules are more precisely defined.

In closing, I need to mention that our strong growth had propelled us upward 10 places in Fortune Magazine 2010, Fortune 500 ranking from number 45 in 2009 to number 35 in 2010. My thanks go out to Medco’s employees and customers for making this possible.

With that I will turn the call over to our CFO, Rich Rubino, who will discuss additional first quarter 2010 financial performance details and provide you with additional color regarding our 2010 guidance. Rich?

Richard Rubino

Thank you Dave, good morning. We are pleased to deliver another quarter of strong financial and operating performance. I will begin my discussion with a report on our balance sheet followed by a review of additional income statement highlights and some points to consider as you look ahead to the second quarter and full year 2010.

As already mentioned the slides on our website will prove helpful and will go along with my commentary and in the spirit of effectively managing time, I will not be reading of every number. Starting with our balance sheet, we closed the first quarter with a cash balance in excess of $1.5 billion. The decline from the $2.5 billion at the end of the fourth quarter for 2009 primarily is the result of $1.2 billion in share repurchases, offset by net cash inflows from operating activities.

Our cash flow from operations for the first quarter of 2010 totaled $300 million. The decrease from 2009 primarily resulted from strong first quarter 2009 retail claim volume growth and the significant 2009 inventory reductions. The company still expects cash flow from operations of approximately $2.3 billion for full year 2010 consistent with previous guidance.

Further, as a result of our working capital management progress, we continue to expect our return on invested capital to grow in 2010 an average well over 30% for the full year. Our total debt for the first quarter remains consistent with fourth quarter 2009 at $4.0 billion.

One last comment on the balance sheet. Our capital expenditures for the first quarter totaled $42.6 million compared to $35.4 million for first quarter 2009. This increase reflects investments in our business to enhance efficiencies across the organization and to fund future growth. We now expect capital expenditures for 2010 of approximately $245 million, up $20 million from our previous guidance. Our priorities are to invest in our core business, invest in our future growth initiatives and make Medco an even more agile enterprise.

As Dave mentioned, we will continue to monitor and evaluate the requirements of the healthcare reform legislation in subsequent regulation that may create the need to further invest in software technology or make other administrative changes.

Moving on to the income statement, our first quarter EPS results were strong with GAAP diluted EPS growth of 15.5%. Including the amortization of intangibles from the 2003 spin-off, diluted EPS grew 15.9%. These growth rates are consistent with the growth we experienced in the first quarter of 2009 when our GAAP diluted EPS grew at a rate of 16%.

First quarter net revenues reached a record $16.3 billion representing growth of 10%. Looking at revenue composition, our product revenue grew 10% while service revenue grew 4.4%. Product revenue growth reflects our significant new business wins as well as higher prices charged by brand-name pharmaceutical manufacturers partially offset by a higher representation of lower priced generics.

Service revenue growth reflects the expansion of our overall client base and includes Medicare Part D services. As Dave mentioned, we continue to expect 2010 mail-order volumes in the range of 107 million to 109 million prescriptions with the growth over the 103.1 million in 2009 spending largely from generics. We continue to expect our full year 2010 adjusted mail-order penetration rate to increase slightly over the 2009 level of 34.2%.

Our other mail-order volume are counted as prescriptions which include OTC items and diabetes supply reached 2.1 million units for the first quarter representing a 23.5% increase as our Europa Apotheek Venlo, including shop-apotheke and Liberty volumes, continue to grow.

Turning to rebates, we earned a record $1.45 billion for the first quarter. This represents 11.2% growth relative to first quarter 2009 attributable to new client wins and improved formulary contracting. It is also a testament to the strength of formulary compliance at mail-order. Our first quarter 2010 rebate retention rate was 12.1% compared to 12.8% in first quarter 2009 as we continue to drive significant value to clients in a highly transparent manner.

Turning to gross margins, our first quarter 2010 gross margin dollars of $993 million, reflects 5.1% growth over first quarter 2009. Our consolidated gross margin percentage decreased by 30 basis points to 6.1% compared to 6.4% in first quarter 2009, primarily driven by a decline in the Accredo gross margin percentage, and the effective client renewal pricing, partially offset by the relatively low contribution from new generics of $0.03.

Remember that, new generic contribution steadily grows over the four quarters of the year with heavy weighting towards the back half of the year, and we continue to expect our gross margin percentage to increase over the remainder of 2010. We currently project a full year 2010 gross margin percentage that is consistent with the 6.7% we achieved in 2009.

Selling, general and administrative expenses of $350.6 million for the quarter increased $10.3 million or 3.0% from first quarter 2009, reflecting higher technology related expenses associated with strategic initiatives.

For 2010 we continue to expect SG&A expenses to increase approximately 3% to 4% over 2009 to about $1.5 billion. Our total EBITDA for first quarter 2010 reached $686.5 million representing growth of 6.1%. EBITDA for adjusted prescription increased slightly to $2.87 from $2.86 in first quarter 2009 in line with our expectations. We continue to expect a 5% to 10% increase in this metric for full year 2010.

Our intangible amortization totaled $70.5 million in first quarter 2010 down from $75.9 million in the first quarter 2009. Our guidance for intangible amortization for 2010 remains unchanged at $280 million to $290 million.

Total net interest expense of $39.3 million for the first quarter of 2010 decreased from $41.6 million in first quarter 2009. Our 2010 guidance for net interest expense remains at approximately $170 million.

The first quarter 2010 effective tax rate was 39.8%, compared to 40.2% in the first quarter of 2009. We continued to expect the 2010 effective tax rate in the range of 38.5% to 39.5%.

Net income for the quarter increased 10.1% to $320.5 million. From the $291.0 million reported for the first quarter of 2009.

Moving on to share repurchases under our $3 billion authorization, we repurchased a total of 19.5 million shares during the first quarter of 2010 for $1.23 billion at an average per share cost of $63.17 which was funded entirely from free cash flow. For April 2010 to-date we reported 600,000 shares for a total cost of $39.6 million at an average per share cost of $55.32. We plan on completing the remaining $292 million in repurchases under the $3 billion authorization prior to its exploration in November 2010. Our weighted average fully diluted share count and basic shares outstanding for the quarter can be found in our slides. We continue to expect that 2010 weighted average diluted share count to be in the range of 465 million to 480 million shares.

Turning to our specialty segment, as Dave already mentioned Accredo achieved record results once again for first quarter for both revenue and operating income. For 2010, we continue to expect revenues in Accredo in excess of $11 billion and operating income of approximately $450 million. As I stated earlier in explaining Medco’s overall gross margin percentage, Accredo’s gross margin percentage declined to 7.1% in first quarter 2010 from 7.8% in first quarter 2009. You may recall that Accredo’s gross margin in the first quarter of 2009 was the highest quarter of the year. In fact first quarter 2010 gross margin percentage is higher than fourth quarter 2009 which was 7.0%. The decline in Accredo’s gross margin percentage for the quarter reflects product, channel and new client mix as well as fewer and less aggressive price increases than historically experienced from biotechnology drug manufacturers.

Moving on to Medicare, we continue to experience growth in our Medicare PDP. For first quarter 2010, Medco’s PDP revenue increased 37% to a record $377 million. As Dave discussed, we are reaffirming our guidance for GAAP diluted earnings per share in the range of $3.05 to $3.15 representing growth of 17% to 21% over 2009, excluding the amortization of intangibles from the 2003 spin-off, our diluted EPS guidance remains in the range of $3.28 to $3.38, representing growth of 16% to 19% over 2009.

I have already walked you through many of the components of 2010 guidance. The additional components are as follows. As we discussed on the call last quarter, our acquisition of DNA Direct in January is expecting to be approximately $0.01 dilutive to 2010 earnings. We continue to expect to renew approximately $15 billion of business in 2010, which include scheduled and early elective renewals. Approximately, 80% of the 2010 renewal pricing already took effect in the first quarter of 2010, with the remainder expected primarily in the third quarter.

The impact of new generic introductions on 2010 EPS remains at $0.25 as we previously guided with approximately 64% weighted towards the back half of 2010, and as a reminder, the estimated quarterly spread of $0.25 reflects a $0.03 first quarter contribution and expected $0.06 in the second quarter, $0.08 in the third quarter and $0.08 in the fourth quarter. The higher utilization of generics in 2010 is still expected to represent a full year revenue offset of approximately $2.8 billion to $3.0 billion compared to 2009.

Pointing to the second quarter specifically, I would like to make the following observations. While our second quarter revenue should be fairly consistent with first quarter, our overall gross margin percentage is expected to increase from 6.1% reported for first quarter 2010 to a second quarter level slightly less than the 2009 full year average of 6.7%.

SG&A expenses are expected to grow from the current run rate it is similar to what we experienced in 2009, we expect that increase in second quarter from first quarter 2010 up approximately 10%. Our EBITDA per adjusted script for the second quarter is expected to grow in excess of 5% over the first quarter of 2010 metric of $2.87.

As I have stated previously, we expect EPS for each quarter of 2010 to increase consecutively. We currently expect our second quarter 2010 EPS to increase at least 5% over the first quarter.

Consistent with last year, we are maintaining guidance at previously announced levels because quite frankly, it is still early in the year. We will revisit our guidance later in the year when we have a clear line of sight into our full year performance.

In concluding our prepared remarks, we remain confident in our ability to continue to drive earnings growth. As you know, we are focused on both our short and long-term earnings drivers. We are delivering real earnings growth today, and investing in important building blocks for further growth tomorrow.

Now, Dave and I would like to open the lines for questions. Brooke?

Question-and-Answer Session

Operator

(Operator Instruction) Your first question comes from Ross Muken with Deutsche Bank.

Ross Muken – Deutsche Bank

Good morning, congratulations on a good quarter. So, we are entering sort of the need of the selling season in the next upcoming months. So, as we sort of think about the positioning for the sales force this year versus last year and sort of what you are focused on and what you think is going to resonate the most, based on sort of our early discussions, what sort of the key message that’s going out there and what is sort of really kind of capturing the minds of the customers this year versus what it’s been the last few years as obviously the business continues to evolve?

David Snow

Ross, if I were to, there are many things, every client has a different set of needs and the nice and good news is we have a portfolio of solutions that they can choose from. That being said, I would say the over arching issue for our customers today continues to be their worries around the inflationary nature of healthcare costs in this country. And as I mentioned in my prepared remarks, this reform bill as it currently stands is inflationary. It does not bend the curve downwards for the clients we serve. So, – but you were to ask me what it is, that they most care about, it’s the solutions that actually get the waste out of the system.

The solutions that actually get at that $350 billion of waste each and every year tied to the poor management of chronic and complex disease. So, I would tell you that our clients are thinking about healthcare in a bigger way and just drug spend. They are thinking about what can be done to make every dollar more efficient that they spend and they know that since drugs are the first line of defense when it comes to treating chronic and complex disease they simply want it done right and Medco has built those solutions, whether it be our therapeutic resource centers or our pharmacogenomic initiatives and frankly the volunteer rate in any of our beta test types of the new things we’re developing is extremely high, we need to ask it once again and we’re fully subscribed.

So, I would tell you that with things steady at the hound here focused on continuing to drive the solutions we know will fix this ever inflating problem because employers don’t have an option. They have to stay in this game. Health plans don’t have an option. They need to stay in this game and we can’t continue the status quo and the only company right now who really is doing something that is uniquely different is Medco and that’s been working for us

Ross Muken – Deutsche Bank

And just quickly sort of follow-up on that – sort of the prevailing thought that despite sort of the new business momentum you’ve had in the last few years, that sort of gap between you and one of your key competitors has closed – in the last may be six months or so.

As you sort of look at kind of the new offering that you are rolling out and kind of some of things that you just focused on Dave – what’s the internal feeling from a competitive standpoint in terms of how you’re positioned versus you competitor versus the prior seasons and as you’re looking at pieces of business coming up, do you feel like your hit rate versus the last few years is probably as good as it is this year as you’ve seen in the last few feel.

David Snow

Yeah, I would tell you looking backwards our – on what we’ve seen and done already. There is a less out there in terms of volume of new opportunities than last year, but still it’s fairly solid. As I said in my prepared comments we have seen in certain circumstances a more aggressive pricing, but we continue to do well because of the – our ability to demonstrate that we actually deliver on the promise I just talked about.

I have said this before it’s easy to mimic Medco’s works. It’s another thing to actually build what Medco has built and today there is a dramatic difference in what is actually even built, so we remain very confident that the platform we’ve built is highly differentiated.

We remain confident that we’re going to continue to build on that platform with further innovations that are very exciting to us and I think that is what matters. I think as Rich said in this comments we have a long-term view here and if people change their marketing message that’s great that’s a short-term effect but the facts are always going to ultimately win in the marketplace and the facts are on Medco side right now.

Ross Muken – Deutsche Bank

Great. Thank you very much.

Richard Rubino

Thank you.

Operator

Your next question comes from Larry Marsh with Barclays Capital.

Larry Marsh – Barclays Capital

Thanks and good morning, just a quick follow-up to Ross’s question Dave on the selling season. You did talked about the aggressive pricing obviously your value proposition resonates. I guess why shouldn’t we be surprised to hear more instances of aggressive pricing if some of your smaller competitors are trying to lock up patients into the Lipitor generic launch at the end of next year? And do you classify the – I think define 1% to 2% gross margin pricing for Health Spring in instance of this aggressiveness?

David Snow

I can’t speak to Health Spring specifically.

Larry Marsh – Barclays Capital

Okay.

David Snow Jr.

Larry, but I would tell you that we are always looking at the generic wave as it goes over the period of time, our contract cover. And we modified pricing to reflect that generic wave, because we share that savings in a ratio of one to five, between ourselves and our clients. So, you will see those – the pricing changes the wave flows through these contracts.

So, it is no surprise, you are right and as I said, I would consider it the market is competitive as it has always been and it strategically I think I can logically in my own mind understand why I’ve seen a few more instances of aggressive pricing than I typically would see. It’s not surprising now and I’m fairly comfortable with what the environment we are working in.

Larry Marsh – Barclays Capital

And I guess you’ve talked about net new positive so far in ‘11, I know it’s early on. So, would you be surprised if you weren’t ending up net new positive by close to $1 billion for ‘11 or is it way too early to tell?

David Snow

It's way too early to tell. I’m not – so many of the customers and prospects out there will not make their decision until next quarter. I’m not going to speculate at this point.

Larry Marsh – Barclays Capital

And second quick question. Is it way too early to talk about the long-term strategic relationship you built with your largest customer United to want to lock up that relationship over the longer period of time? I know you’ve talked about its expiring and its current contract end of ‘12 or is it not too early to kind of have these conversations?

David Snow

I think it’s too early, Larry, but obviously you don’t, it is very early relative to that contract expiration. Obviously, we feel that we have a very good relationship with United at all levels and we are going to have to go into that process at some point, probably towards the end of this year. But it would be really too early to even speculate about where that’s going to go now.

Larry Marsh – Barclays Capital

Okay. And then I guess a quick follow-up for Rich. It sounds like, Rich; you are saying range of guidance for the second quarter, in sort of that $0.78 area, that’s the way I do the math. So, it seems like to get to kind of consensus assuming the higher end you’d have to have Q3 and Q4 in the low 20s to mid 20% growth rates year-over-year. So, I guess besides the sequential couple cent benefit Q3, Q4 on generics, what else should we be thinking of that will help you get to those kind of higher growth rates in the second half?

Richard Rubino

I think you should expect to see not only the generic benefit. I think you have to look at also the profit dynamics in the course of last year as well. You will see quarter-over-quarter improvements. You’re going to see the gross margin improvements and once we get past the 10% growth hurdle in the second quarter of SG&A that should pretty much flatten out for the rest of the year. And depending on what we see in the world of Accredo that may be a tailwind as we get towards the backend of the year as well. That will be in part contingent on where the biotech manufacturer price increases end up.

Larry Marsh – Barclays Capital

Okay, very good. Thanks.

David Snow

Thanks Larry.

Operator

Your next question comes Lisa Gill with JPMorgan.

Lisa Gill – JPMorgan

Good morning. Dave, I have to say, I like your acronym EGWP, we have been calling it ECWP. My question is around the retirees. Can you possibly just breakout for us what would be the best case scenario for you? Is it the current subsidy is it that they move into your Part D plan or actually managing the EGWP on behalf of the employer?

David Snow

Yeah I think the best right now is EGWP simply because it really does solve our clients’ problem and it works equally well for us. Some will probably stay with the subsidy. Those are the two best choices and honestly I think those are the most likely choices for a large percentage of the total. I am going to let Mary Daschner who is with us today and runs all of our retiree solutions group, give you some additional color Lisa just because she is dealing with this every single day and working with our clients every single day. Mary do you have some thoughts about it?

Mary Daschner

Yeah. So, Lisa I agree with Dave’s comments in terms of how employer plan sponsors are looking at these changes. I think that there is a pretty high percentage of them that wanted to stay in the group product and the EGWP does provide a very flexible alternative where they can have substantially similar benefits. I also think the important thing to remember is 2013 is really when the actual changes that impact the retiree drug subsidy portion for planned sponsored take effect.

So, right now I think there is lot of evaluation for us. We believe the group products are the best fit for many of these employers, less administrative burden and high flexibility.

Lisa Gill – JPMorgan

And I know it’s so early to do this, but I mean if you had to handicap what you think will happen in 2013, can you put a number around that as far as your expectations on current conversations, the number that will stay either in existing programs or EGWP. Really where I think what we are looking for is the number that potentially can move away. Do you have any indication this early on?

David Snow

It really is early Lisa and as Mary said people are evaluating their options but the best I can do right now is give you a qualitative response and not a quantitative response. My qualitative response based upon my own conversations with the sample of our clients who have this legacy problem is that they feel as companies that they’ve made a commitment to retirees and they don’t want to betray that promise, but they are looking for ways to better manage their situation given the loss of this subsidy through taxation.

So, it is not a clear cut – let’s just get out for most of them. Its, how can I best optimize the dollar while maintaining as best I can recognizing I also have a responsibility to shareholders, maintaining my obligation to those people who work for me for years who will now retire and I think just as a framework, a mental framework that is how they are thinking.

Tim is also here with us today and obviously many of the ones were most affected and we also have retirees who are in not profit worlds or a different story. They are not really affected here. It’s really in Tim’s group, his clients. And I don’t know Tim if you have anything to add to what I just said.

Timothy Wentworth

No. I mean you think you nailed it Dave. We’re doing extensive modeling I mean we are leveraging what I think is clearly the best service model in the industry where all of our clients have dedicated financial support as well as clinical support to help the clients take a look right now as the decisions that they may be facing over the next couple of years and what we see is exactly what Dave said which is very strong interest in EGWP.

Some of them have to retain RDS subsidy for other reasons but again its case by case but when we look at it on a macro basis, I’m quite comfortable that we’re going to continue to do what our clients want us to do which is help them, virus [ph] healthcare, reform healthcare and not wait for the government and retain the coverage so that they are in somewhat higher level of control what actually happens in terms of their cost structure.

David Snow

So Lisa, just going back to the formal comments I made earlier. We are feeling very good about how we’re positioned in this space. We are very thankful that in 2006 we made the decision to build out our capabilities around these EGWP products because back in 2006, they weren’t really the mainstream, the RDS subsidy was the mainstream, but we made the investments in EGWP and we do have the most in the country right now in EGWP.

So, we’ve really got this operating experience. We’ve got a platform that is uniquely built to handle EGWP products. And so I’m just thankful now that we’ve invested the time and energy back then, not knowing that this legislation would shift the focus to these new products which really works well for us.

So, you also have my promise that we will keep you updated at least qualitatively even though it played out over several years.

Lisa Gill – JPMorgan

Right.

David Snow

We will do our best to keep you updated relative to the testament of the employer groups we are working with just so Lisa, you can adjust your models as we have better information.

Richard Rubino

I can help with some additional color on that, Lisa for you. We’ve shown before that of all our health plan lives. RDS represents about 15% of that overall pie. And about a third of that or 5% in fact our clients that are basically not taxable. So that brings the number down even further.

If you look at the RDS lives over 65 years old, you’re talking about a percentage of our lives that’s in the low single-digits. So, I just want to make sure that you keep it in perspective with regard to the portion of our overall population that’s affected here. And other important point we touched on earlier is, building on that chassis, the PDP chassis.

We are hopeful that this excellence at EGWP will not only be a very powerful retention tool, but importantly a growth engine for us because of the high level of operational excellence we have with these very complex Medicare oriented plan designs combined with a very significant investments that we are making in capital to not only maintain that excellence but drive it to a new level. That’s one of the reasons why we increased our capital expenditures this year by other $20 million. We believe that the return on that investment will be very high as we proceed into more government programs going forward.

Lisa Gill – JPMorgan

Right. I really appreciate all the detail today. Thanks very much.

David Snow

Thanks Lisa.

Operator

Your next question comes from Ricky Goldwasser with Morgan Stanley.

Ricky Goldwasser – Morgan Stanley

Hi. Good morning. A couple of questions first of all Rich just to clarify on your guidance for second quarter and you talked about EBITDA per adjusted script in excess of 5% growth, which I think puts the number at about 301 which is down year-over-year. So, if you can just clarify that and then if you can breakdown for us what’s kind of like driving that year-over-year change and what would drive upside to this number because I think you said 5% is very minimum, so how can we get to a higher rate?

Richard Rubino

Yeah. Ricky, you are being very precise in your math. It’s very difficult as you know to project quarter-by-quarter what EBITDA per adjusted script will be. So, I kind of – I gave you the floor of what it could be. There is a risk potential to more upside in the second quarter. So you will have to stay tuned. Usually, the drivers of the EBITDA for script are a function not only of our raw financial performance, but the mix in scripts.

So retail volumes as you know came in a little bit stronger than we originally expected for the first quarter and we really need to see what happens with those retail script volumes in the second quarter. One thing we saw in the first quarter was we did see antiviral come in strong in the early part of the quarter and they slipped away as we got to the tail end of the quarter, but antihistamines have in fact climbed and I think it's at least in part tied to the early allergy seasons and I think it's going to be one of the tougher allergy seasons this year. So that could in fact drive those retail volumes a little bit stronger in the second quarter. So, there is a bit of a hedge there with regard to the retail volumes

Ricky Goldwasser – Morgan Stanley

Okay and then on the retail volume, what was the mail penetration or the retail penetration for the business that you added on in 2009? What was the mail pen for first quarter?

Richard Rubino

Okay, so I am going to give you a couple of answers to that. One, we stated in the script, actually it's in the earnings release which is the new accounts in 2010, I know this isn’t your intermediate question, with the new clients in 2010 we are expected to have mail-pen of 25%. That’s coming in nicely at 31% and actually year-over-year 31%. When you look at the – our clients from last year, new wins from last year into this year, combined with the overall same-store growth in mail order pen we actually saw, I believe is was 80 or 90 bps of mail pen increase thus far this year.

So, we’re seeing a nice uptick in mail penetration and you obviously you see that in our volumes and a very important statistic which I did mention in my prepared remarks is we have a record number of mandatory mail or retail refill allowance lives, quite a bit of growth this year. So we now have almost 12 million lives on those programs that favor mail but that’s up 8% from what we have in the fourth quarter of last year. So very nice sequential quarter growth in those programs as clients recognize the cost saving potent at mail.

Ricky Goldwasser – Morgan Stanley

Okay, and then lastly just one question on Protonix. I was wondering do you still have supply of generic Protonix and have you changed your EPS contribution assumption for the specific product as a result of the jury decision last week?

Richard Rubino

Yeah. I’m not going to get into what we have in supply. I will tell you that that decision will have zero effect on our earnings guidance for 2010.

Ricky Goldwasser – Morgan Stanley

Okay, thank you very much.

Operator

Your next question comes from the line of Robert Willoughby with Banc of America/Merrill Lynch.

Robert Willoughby – Merrill Lynch/Bank of America

Rich, can you detail or give us some anecdotal data points on what drives that SG&A spend up sequentially as much as it is?

Richard Rubino

Yeah. If you look at the pattern first quarter, second quarter of last year, say in this year is we give our employees raises on April 1st. So that always gives you a pop in the second quarter. So, you have the financial component where the base salary raises and we also have the equity-based compensation kicking in or weighing in more heavily in the second quarter than the first quarter. And those are the primary drivers in addition to just pursuing our strategic initiatives as we get deeper into the year.

Robert Willoughby – Merrill Lynch/Bank of America

And maybe year-over-year then first quarter the SG&A as a percentage of revenue, you did a great job there. What were the big drivers of that anecdotally?

Richard Rubino

Well, we continue to keep our eye on the ball with regards to driving as efficiency as possible. So, we are creating centers of excellence. For example they’re basically concentrating areas of expertise and eliminating duplication across the enterprise.

We’ve been doing that for a number of years. We’ve talked about that before. And particularly, if you look at probably the highlight of our efficiency this year, it’s in Accredo, Accredo despite their massive revenue growth, they actually had a decline in SG&A year-over-year as they continue to generate synergies out of that rapidly growing business.

Robert Willoughby – Merrill Lynch/Bank of America

Okay. And going forward, do you see, are there other meaningful areas there or is it just gradual improvement on all fronts?

Richard Rubino

We are relentless. Over the next three to four to five years, I can tell you that Kenny Klepper and I are partners in watching every nickel in SG&A as we go through the next year.

Robert Willoughby – Merrill Lynch/Bank of America

That’s great. Thank you.

Operator

Your next question comes from the line of Steven Valiquette with UBS.

Steven Valiquette – UBS

Okay, thanks. I guess, first I’m not going to ask any questions on EGWP, I’m getting too hungry at this state. I guess a layup question here. Just any updates in your latest thoughts on using your cash to acquire other PBM books of business and maybe on the blocks. I guess the question would be has your appetite increased or decreased or stayed about the same versus six, 12 months ago and also have the opportunities increased or decreased based on your view? Could you just put some general thoughts around that?

David Snow

Appetite is the same. We will remain opportunistic as opportunities present themselves and I would tell you nothing has changed since last quarter when we discussed it.

Steven Valiquette – UBS

Okay, all right. Thanks.

Operator

Your next question comes from the line of Tom Gallucci with Lazard.

Richard Rubino

Good morning Tom.

Tom Gallucci – Lazard

A couple of follow-ups if I could. I guess, you were talking about the better mail penning in some of the new business, last year I guess, we saw some pressure on brands within mail, maybe given the economy or what not. So, what are you sort of attributing the better penetration to and how are we seeing that trend that we saw last year develop this year in terms of more pressure on brands versus generics in the mail?

David Snow

Well, what’s interesting, is the benefit designs that are driving mail, Rich mentioned a nice growth in our retail allowance or mandatory mail programs. Is it a consequence of I think partially anyway, the pressure last year at the times of recession. So, people made decisions last year that you are seeing benefit from this year as it drives mail.

I would also tell you that we have clients who – as they look at the additional value prop we have created at mail clinically on top of the financial incentives we’ve historically had and the convenience incentive, I think they are more willing to create a benefit design that pushes type specific disease categories mail.

You also are seeing right now very strong growth in generics at mail and that if she goes on the brand side. Again, I think that continues to be the fiscal drivers from last year carrying over to this year, where people are just being better consumers, more prudent with their money and making choices that we’ve always encouraged. They are just more motivated to make them. So, I think the recession last year had benefits this year in our performance.

Richard Rubino

Yeah. And we continue to see increased generic penetration from the older products such as Simvastatin and even Synthroid continue to grow in the overall book.

Tom Gallucci – Lazard

Okay. And then, some attention lately, just curious how you view the idea or the possibility of the postal service not offering any Saturday delivery? We’ve gotten questions on that lately?

David Snow

Yeah. That’s an interesting development, I think what’s important to watch there is the Postmaster General, Jack Potter has a board basically that is Congress and when you look at the portfolio of solutions he has to the declining volume of flat and through the postal service, that they make 70% of their revenue on first class flat mail and they need to rescale their retail footprint which is a very important thing. They need to deploy more technology.

They need to re-rationalize delivery points for mail, but Congress is slow to do that. So, what the Postmaster General is doing right now is using six to five day as the strategic point to draw attention. One of the bigger problems that postal service has is they are funding future FASB liability tied to the retiree benefits both pension as well as health.

They’re the only civil service part of the government that is actually funding future liability and they are overpaid today but they are being asked to continue to pay and that’s one of the big issues Jack Potter is working with. So, for now what I would tell you is that Congress isn’t really enthusiastic about going from six to five. Going from six to five if you look at the details behind the plan it wouldn’t hurt us at mail because they are talking about keeping the retail outlets open on that six day.

So, if you are expecting your drugs for example, you can go to the post office to get them. On the other hand there are better places for the postal service to find those efficiency. One is fixing this overpayment situation tied to these future liabilities. That’s a first opportunity. Second is rationalizing retail and we are involved in this process, down in Washington ourselves. It's not one of our biggest concerns, but we are involved because the postal service is part of our delivering mechanism and their future is important to us.

Tom Gallucci – Lazard

The last one if I could Rich. You mentioned some mix issues and some price inflation issues on the Accredo margins, is there any way to sort of frame the relative impact of one versus the other?

Richard Rubino

I would say they are probably pretty even contributors, the product mix, the channel mix and the new client effect. I don’t think there is one that really massively outweighs the other.

Tom Gallucci – Lazard

And the mix versus the inflation?

Richard Rubino

Well, the inflation – I would say if we had inflation in the first quarter of 2010 as we had in the first quarter of 2009, we have a much more favorable comp first quarter to first quarter that’s for sure.

Tom Gallucci – Lazard

Thank you.

Richard Rubino

Thank you.

Operator

Your next question comes from Randall Stanicky with Goldman Sachs.

Richard Rubino

Hi Randall.

Randall Stanicky – Goldman Sachs

Hey guys. Thanks for the question. Just two quick follow-ups, first Dave on the aggressive pricing comment, are you seeing early renews or do you expect to see a pickup in early renews as you think about the upcoming selling season?

David Snow

You will see some early renews Randall, I would say you are going to see consistent with other years. We’re not accelerating, we’re not picking it up well we’re business as usual, very strategic when we choose to do it.

Yeah. Randall, let me make a couple of points on that. First of all with regard to the $15 billion renewals that we’ve been pointing to for 2010, that’s been fairly consistent over the past couple of quarters and that is the mix of schedules early in electives, and we stop to that number. So, that is the latest update. That’s gives you an indication.

With regard to 2011, 2011’s renewal year will be – we expect more in line with 2009. But that also includes a large portion of early elective renewals. So, and I can tell you that actually we made some decent progress regarding the scheduled renewals for 2011 already. In fact, we’ve closed about 25% of our scheduled 2011 renewals.

So, I want to make sure that our analysts understand that when you look at the $20 billion plus that maybe up for 2011, much of that or a decent chunk of that is under our control. Last point, I want to make is we talked about selective instances of aggressive pricing. But broadly, speaking what we’ve seen historically today is generally rational pricing. That’s a very important point I want to make also.

Randall Stanicky – Goldman Sachs

That’s helpful. And so I mean, in terms of pricing, do you think that’s more related to the fact that you have a big generic opportunity coming rather than a change in the underlying competitive thoughts with your peers?

David Snow

I think it's both. I think there is a need to post some wins out there and I think that changes the strategy and I mean, it’s logical I can understand it. But, I think that both are in end points here. But this is right, its specific, it’s not across but it's very target specific.

Richard Rubino

And that’s why our differentiation is so critical, because there is so much value that we can drive for client’s total healthcare costs through our programs. It goes far beyond the fill centric model.

Randall Stanicky – Goldman Sachs

Okay, that’s helpful. Thanks guys.

David Snow

Thanks.

Operator

Your next question comes from Ann Hynes with Caris.

Richard Rubino

Good morning Ann.

Ann Hynes – Caris

I have a couple of questions on the growth margin sequential decline. Can you breakout what it would derive from the specialty, what was the driver from pricing and what was may be a mix issue, I know you said that retail climates were higher than you expected.

Richard Rubino

If you’re just looking at the fourth quarter of ‘09 to first quarter of ‘10, we had the decline from 6.7% to 6.1%.

Ann Hynes – Caris

Yeah.

Richard Rubino

All right. And it may be was a function of the normal routine things, you’d see in the first quarter. So, you have your client renewal pricing somewhat higher distribution expenses because you are starting up with a lot of new clients and that’s partially offset by stronger mail generic margin and a little bit of tailwind with regard to startup costs which went from about $0.02 in the fourth quarter to about $0.01 in the first quarter of this year.

It’s not – it’s actually less of, of this decline in gross margin percentage that we saw in the fourth quarter of ‘08 to the first quarter of ‘09 where we went from 7.5% down to 6.4%. So, all in all it should be in line with what you expect. Looking at the dollars, when you look at the gross margin dollars from the fourth quarter to the first quarter, the decline from fourth quarter ‘08 to the first quarter ‘09 was 3%. The decline from fourth quarter ‘09 to first quarter of 2010 was 3%. So, you are pretty much in the zone.

David Snow

I would actually just point out a more general rule and that as you’ve seen, especially in the last three years Medco has been a very significant net new sales winner and big sales in any given year tend to affect Q1 of the following year, just tight implantation whether it be ramping up to serve, creating the software to administer, it’s a lot of work and there is always going to be that consequence. So, this is actually a very consistent pattern you’ve seen for three years now.

Ann Hynes – Caris

Okay great and then on those renewal contracts that took effect in Q1. What percentage of those contracts actually allow you to push mail may be versus 2009. I know that you have said that you have 80 some bps improvement over 2009, so as you go out through the year do you expect that to even increase further given sometimes it takes a quarter or two for these contract to really get it mail penetrated?

Richard Rubino

We will have to stay tuned on now. Well I would say that out of the shoot we certainly were delighted with the higher mail pen, but – so we’ll have to monitor that closely as you can imagine we’re analyzing it very closely now but I think we got to get another quarter under our belt to see what kind of trends we’re going to see.

Ann Hynes – Caris

Okay. One last question when you look at obviously all the pharmaceutical companies reported, then they have to reduce revenue because of health reform. Are you worried that they might try to pass some of that on to you to pricing or lower rebates and if they try to do that I guess what can you do to combat it as a risk?

David B. Snow, Jr.

We’re actually not worried because the way they combat it is they raise AWP.

Ann Hynes – Caris

Okay

David B. Snow, Jr.

Which affects positively our revenue, so I mean.

Ann Hynes – Caris

You are not worried about it?

David B. Snow, Jr.

No, I mean basically we are seeing that occur right now and that – so we are not worried.

Richard J. Rubino

Yes. Further to Dave’s points. Small molecule brand inflation is on a path to be consistent with what we saw in 2009 which was over 9%

Ann Hynes – Caris

Okay. Great, thank you.

Richard J. Rubino

Okay. Thank you.

David B. Snow, Jr.

We have one more.

Operator

Your next question comes from the line of Helene Wolk with Sanford Bernstein.

Helene Wolk – Sanford Bernstein

Good morning and thank you. Just a couple of quick questions on balance sheet question, first around cash deployment priorities, looking at your cash flow guidance and your share repurchases in the quarter, it looks like you’re going to build up or potentially building up a lot of excess cash. Can you just help remind us around the priorities and whether there is upside here around continued share repos?

Richard Rubino

Right, so we did – as I have promised previously, we did do the majority of this year’s share repurchases in the early part of 2010. We do have just shy of 300 million to go under the current 3 billion authorizations; I would expect that would be wrapped up in the next couple of quarters.

We don’t have a new share repurchase plan authorized at this point. That’s something that is authorized ultimately by the Board, we do not have that authorization, so we’ll see what’s happens later on in the year. In the mean time it is fair to assume that cash balances will likely build from here and as I have said many times before we have that staircase that I showed on Analyst Day with all the different growth prospects we have between now and 2020 and to the extent acquisition opportunities will rise that help us climb that ladder.

We will certainly take advantage of that and to the extent we are so highly differentiated that we can’t find companies out there to buy and committed to investing in this company over the next few years to drive our future growth. So, our mantra has not changed at all in that regard Helene.

Helene Wolk – Sanford Bernstein

And in terms of just the follow-on around the acquisition front, anything in terms of clinical capabilities within the portfolio that is an opportunity or on area of focus?

David Snow

All I can tell Helene is stay tuned.

Helene Wolk – Sanford Bernstein

Okay. And then I guess one last just simple balance sheet question, accounts payable look like a significant drain in the first quarter, is that purely a timing issue, anything we should know around working capital metrics just some color around what happened there?

Richard Rubino

Sure. I can answer that for you. Actually the retail claims liability. The retail claims liability in 2009, the first quarter of 2009, actually increased which is odd based on the timing of our claims cycle. It increased because the timing of the cycle was over powered by the massive increase in retail claims from our massive client wins last year.

So, that claim liability grew by $400 million in the first quarter of last year when that liability grows, it is a source of cash. This year was actually more a normal year where we in fact have the liability declined by about $700 million which is just using the math results in a use of cash. So, it really is a question of the retail claims activity in the first quarter that will balance out over time. I do expect our second quarter cash flows to be stronger and I can tell you that the $300 million of cash flow this quarter is higher than the third quarter of cash flows that we experience in 2009. So, it’s not that far out of the range of what we’ve experienced historically.

Helene Wolk – Sanford Bernstein

Okay. Thank you.

Richard Rubino

Thank you Helene.

David B. Snow, Jr.

Okay. Thanks everybody. We appreciate the time you spent with us this morning and look forward to talking with you next quarter.

Operator

Thank you. This concludes today’s conference call. You may now disconnect.

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Source: Medco Health Solutions, Inc. Q1 2010 Earnings Call Transcript
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