The nation’s largest pharmacy benefits manager (PBM)

Casey Bozeman

Company OverviewIntegrated PBM services, including:

network-pharmacy claims processingdrug-utilization reviewformulary management mail-order pharmacy servicebenefit-design consultationmedical & drug data analysis services

Clients include government agencies,  corporations, and labor unions

Company Overview, cont’d

1.4 billion prescriptions managed annually

135 million patients (1 in 3 Americans)

$94 billion in revenue in past 12 months

Doubled in size with acquisition of Medco in April 2012

Traded on NASDAQ as ESRX

Company Overview, cont’d

Headquartered in Cool Valley, Missouri 

George Paz, President & CEO since 2005CPA, Financial genius, PR nightmare

#6 most highly-compensated CEO in U.S.: $52M (Forbes)

Not a single pharmacist on his leadership team

Earlier News Stories (prior to 2013)

Bitter contract dispute with Walgreens, nation’s largest drugstore chain

No contract for 9 months in 2011Walgreens suffered nearly 30% loss in

script volume, ESRX barely flinchedNew contract agreed upon in

September 2012

Background info sources: Express-Scripts.com, Wikipedia, Insider-Monkey.com

January 22, 2013Five Pharmacies Now Dominate U.S. Prescription DispensingCVS Caremark, Walgreens, Express

Scripts, Rite Aid, and Walmart63% of U.S. Rx dispensing revenues in

2012Healthcare reform will benefit these

companies, due to increase in total Rx spending

BusinessWire.com

January 23, 2013Express Scripts Lays Off 330 Employees Nationwide

Layoffs across 55 different sites100 employees in a former Medco

office in NJ were impacted

Memphis Business Journal

February 7, 2013Express Scripts Bleeds the Medco Ranks, Again“Express Scripts is reportedly telling

up to 200 workers to accept a pay cut of up to 40 percent or leave...” 

Medco acquisition cost $29 billion last spring

Suspicion that ESRX may abandon Medco’s HQ in New Jersey

Pharmalive.com

Q1 2013Express Scripts Labs: ScreenRxExpress Scripts’ proprietary solutionUses 400 known factors about the

patient, MD, the disease, and the medication to predict non-compliance before it happens

Up to 98% accuracy Pharmacist can intervene to help high-

risk patientsLab.Express-Scripts.com

February 19, 2013Express Scripts Accuses Ernst & Young of Stealing Trade SecretsOne of E&Y’s former partners allegedly snuck into

ESRX facilities several times in 2012, emailed confidential files to himself

Over 200,000+ pages of pricing info, business projections and strategy were stolen

“Evil motive”: to boost E&Y’s own healthcare business

Complaint seeks damages plus a court order barring the disclosure of the stolen data

Reuters.com

February 19, 2013Express Scripts 4Q Profit Jumps 74%

More pts used generic drugs, increasing ESRX’s profitabilityPatents expired on many common drugs

ESRX continued to absorb MedcoSuccessful contract with Walgreens

contributed greatlyESRX has very low operating margins: ~5%

PharmPro.com (Associated Press)

Q2 2013Express Scripts Labs: Rx Abuse & Pharmacy Fraud More Deadly than Cocaine & Heroin Combined15,000+ Americans die annually from

prescription drug ODEstimated 3-10% of healthcare spending is lost to

fraud in U.S.Express Scripts data analytics uncovers patterns

of potential fraud/abuseEstimated savings due to 435 cases referred to

authorities by ESRX in 2011: $500MLab.Express-Scripts.com

March 15, 2013Express Scripts: Best Places to Work FinalistSt. Louis Business Journal

Employees must adopt a “can-do” attitudeCulture is one of “high energy”

St. Louis Business Journal

April 1, 20133 Reasons to Buy Express Scripts

Motley Fool says ESRX stock is a “Buy”:$290 billion in drugs coming off patent over the next 5 years

Aging populationObamaCare: many more people will have Rx insurance

Motley Fool (Fool.com)

April 8, 2013Bonuses are Back at Express ScriptsESRX share price rose 21% in 2012vs. S&P 500 increase of 13.4%

Revenue more than doubledMarch 28, 2013Express Scripts CEO’s Compensation Jumps 50%

St. Louis Today (STLToday.com), Yahoo! News (news.yahoo.com)

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To Buy or Not to Buy?If it’s good enough for the Fool…EPS has consistently risen since

2006Long-term earnings potential,

staying power, and negotiating powerTo Work or Not to Work?

I’d rather not…