Express Scripts Holding Company is the leading American pharmacy benefit management (PBM) organization, based in St. Louis, Missouri. The company manages prescription benefits for millions of Americans.
A holding company is one that has a controlling interest in other companies. In other words, it has subsidiaries.
It is publicly listed on the New York Stock Exchange (NYSE) under the stock ticker symbol ‘ESRX’.
Its clients include managed care organizations, health insurers, government organizations, companies, and unions.
Prescription drugs is a crucial component of modern healthcare and often the first line of treatment for many medical conditions.
Express Scripts combines retail pharmacy claims processing, formulary management, utilization management and home delivery pharmacy services to create an integrated product offering to manage the prescription drug benefit for payors.
It also provides pharmacy benefit management services for workers’ compensation insurance programs.
Express Scripts acquired Medco Health Solutions in April 2012 (in a deal valued at $29.1 billion). The acquisition made Express Scripts the largest pharmacy benefit manager in the US – filling over 1.4 billion yearly prescriptions.
History of Express Scripts
Express Scripts was founded in St. Louis, Missouri in 1986 following a joint venture between Sanus Corp. Health Systems and Medicare Glaser Inc. (a retail chain of more than 79 pharmacies).
It was bought out in 1989 by New York Life Insurance Company and went public in 1992. The following year the company signed on corporate clients such as Lockheed Corp., Service Merchandise Co., and Ingersoll-Rand Co.
In 1994 it made a major expansion by adding reinsurance and workers’ compensation prescription services. The same year it announced a two-for-one stock split (a stock split is when a company increases the number of shares outstanding, which in this case meant they doubled). Two years later it created Express Scripts Canada and launched the annual Drug Trend Report.
Express Scripts Inc bought ValueRx (Columbia/HCA Health Corp’s PBM business) in April 1998. In 1999 it acquired SmithKline Beecham Corp for $700 million from Diversified Pharmaceutical Services.
Express Script’s unsuccessful attempt to acquire Caremark
In 2006 Express Scripts made an offer to acquire Caremark. However, the company lost the race to purchase the company to CVS Corporation, which later became CVS/Caremark Corporation in 2007.
Acquisition of Medco Health Solutions
Express Scripts completed a $29.1 billion acquisition of Medco Health Solutions in April 2012. Formal approval of the transaction was given by the Federal Trade Commission on April 2, 2013 following an anti-trust investigation.
The acquisition allowed Express Scripts Holding to become the country’s number one pharmacy benefit manager.
Drug Trend Report
Since 1993 Express Scripts has published its Drug Trend Report, which offers a detailed analysis of prescriptions drug costs and utilization. There is now a web-based version, which can be accessed online. The Drug Trend Report is published by the Express Scripts Research & New Solutions Lab. Its reports offer insight into understanding consumer behavior related to healthcare benefits as a means of driving out pharmacy-related waste.
Express Scripts Holding Company – Overview
- Chairman and CEO: George Paz
- President: Timothy Wentworth
- Type: Public
- Industry: Healthcare/Pharmaceuticals
- Publicly listed on the New York Stock Exchange (NYSE)
- NYSE stock ticker symbol: ESRX
- S&P 500 Component
- Revenue: $104.098 billion USD (2013)
- Net income: $1.872 billion USD (2013)
- Diluted earnings per share: $2.25 USD (2013)
- Founded: 1986
- Employees: 29,975 (2013)
- Corporate headquarters: One Express Way, St. Louis, Missouri, USA
- Corporate contact number: (314) 996-0900
- Investor relations contact number: (314) 810-3123
- Investor relations email: [email protected]
- Website: http://www.express-scripts.com/
Express Scripts Holding Company – Financial Results
| Operating data (in $ millions) | 2013 | 2012 |
| Revenues | $104,098.8 | $93,714.3 |
| Cost of revenues | $95,966.4 | $86,402.4 |
| Selling, general and administrative expenses | $4,580.7 | $4,518.0 |
| Operating income | $3,551.7 | $2,793.9 |
| Income before income taxes | $3,030.3 | $2,200.4 |
| Provision for income taxes | $1,104.0 | $838.0 |
| Net income from continuing operations | $1,926.3 | $1,362.4 |
| Net loss from discontinued operations, net of tax | $(53.6) | $(32.3) |
| Net income | $1,872.7 | $1,330.1 |
| Net income attributable to non-controlling interest | $28.1 | $17.2 |
| Net income attributable to Express Scripts | $1,844.6 | $1,312.9 |
| Balance sheet data (in $ millions) | ||
| Total assets | $53,548.2 | $58,111.2 |
| Total liabilities | $31,703.4 | $34,715.5 |
| Total stockholders’ equity | $21,844.8 | $23,395.7 |
| Cash flow data (in $ millions) | ||
| Net cash provided by operating activities | $4,757.5 | $4,781.6 |
| Net cash used in investing activities | $(72.1) | $(10,391.7) |
| Net cash provided by (used in) financing activities | $(5,494.8) | $2,823.6 |
| Cash and cash equivalents at end of period | $1,991.4 | $2,793.1 |
| Common share data (in $) | ||
| Basic earnings (loss) per common share | $2.28 | $1.80 |
| Diluted earnings (loss) per common share | $2.25 | $1.76 |
Source: “Express Scripts Holding Company 2013 Annual Report”