THE BUSINESSWEEK 50 RANKINGS + 25

69

Express Scripts

Express Scripts is tired of being the nation’s third-largest pharmacy benefits manager. In December the company made a decidedly unwelcome $26 billion bid for its second-place rival, Caremark Rx—just as Caremark was ready to accept a $20 billion merger offer made a month earlier by drugstore giant CVS. The three companies have been battling it out ever since in the courts and the press. Caremark voters were scheduled to vote on the CVS deal on Mar. 16. The lunge for Caremark fits in with Express Scripts’ long-established strategy of growing through acquisitions. It has absorbed five companies since going public in 1992, three in the last four years. With CEO George Paz now in charge, that has given Express a big footprint—50 million members—in a fast-growing industry that’s benefiting from the desire of employers and insurers to hold down rapidly escalating prescription drug prices.

Overall Grade

A-

Market Data

ESRX

Market Value
(2/28/2007)

$10.2 Billion

Profitability*

31.4%

A-

Sales Growth Rate**

9.7%

C

12-Month Sales

$17.7 Billion

12-Month Net Income

$0.5 Billion

Total Return Past 12 Months

-13.6%

Past 36 Months

106.6%

Economic SectorHealth Care
IndustryHealth Care Services
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.

George Paz

George Paz, 51

CEO since 2005


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Data as of 2/28/07 provided by Standard & Poor's Compustat