Merck Acquisition Of Medco By Merck

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MERCK ACQUISITION OF MEDCO WRITTEN ANALYSIS Merck & Company was the world largest drug manufacturer during the 1990’s. They planned to acquire Medco Containment Services Incorporated which was the largest prescription benefits management company (PBM) and marketer of mail-order medicines in the United States. They were both in the pharmaceutical industry. Merck planned to acquire Medco for $6.6 billion on July 28, 1993. I believe that their merger will be beneficial to each other because the major force driving the acquisition of Medco by Merck was Medco’s extensive database which contains a computer profile of each of its 33 million customers, amounting to 26% of all people. Medco clients include 100 fortune 500 companies and 58 Blue Cross Blue Shield group and insurance Companies. Basically, Merck will Medco database to identify prescriptions that can be switch to a Merck drug. By having access to Medco database, it will definitely increase their sales. That database can also allow Merck to determine the patient that did not refill their prescriptions which can lead to a considerable decrease of sales revenues each year. Finally, Merck will also use Medco computerized patient record system to show that the premium paid for Merck drug is worth the price charged. The merger will also save about $ 1 billion a year in our operations. Medco database is very crucial for Merck and as for the merger. It will really help Merck target and achieve a precise

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