mail order Archives - Recon Strategy

ESRX-MHS Part 2: mail facility speculations (…or: Indulging my Inner SWAGer)

Tory Wolff August 1, 2011

Summary ESRX was running at close to maximum capacity at its mail facilities while MHS has room to spare. ESRX is facing a scenario of significantly increased demand as greater mail penetration is achieved in the Wellpoint book and lacked the capacity to meet this demand. Similarly, ESRX would not be able to meet increased demand from reform coverage expansion. By combining, ESRX avoided having to build a new facility and the combined entity appears to have enough capacity to close at least one older mail facility. Given that a

ESRX-MHS Part 1: Last stand of the PBM pure play: observations on the Medco-Express combination

Tory Wolff July 29, 2011

UNH’s decision to take the commercial PBM business in-house did not force MHS into ESRX’s arms: I would argue that it removed the major roadblock to what the companies wanted to do anyway. MHS and ESRX had been talking about a merger off and on for few years (per WSJ reporting) and the logic (laid out below) is compelling but FTC concerns must have kept getting in the way. UNH’s decision doubled the size of its PBM subsidiary in terms of lives (somewhat less in terms of scripts because the

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Recon takes an analytical look behind select developments in healthcare

ESRX-MHS Part 2: mail facility speculations (…or: Indulging my Inner SWAGer)

ESRX-MHS Part 1: Last stand of the PBM pure play: observations on the Medco-Express combination

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