Medco Health Falls on Concern 2011 Growth Isn’t Picking Up

Medco Health Solutions Inc., the largest U.S. prescription benefits manager, fell the most in seven months in New York trading on concern that profit growth isn’t accelerating.

The Franklin Lakes, New Jersey-based company’s failure to increase its 2011 forecast may have led investors to temper optimism, said Arthur Henderson, an analyst at Jefferies & Co. in Nashville, Tennessee. Medco affirmed today its 2011 per-share forecast of $3.99 to $4.12.

While earnings were “just fine” in the fourth quarter of 2010, “this year is just kind of steady as she goes,” Henderson said in an interview. “That, for some people, is maybe not enough at the moment.”

Medco slid $3.33, or 5.1 percent, to $61.45 at 4 p.m. in New York Stock Exchange composite trading, the biggest decline since July 22. The company reported fourth-quarter earnings of 94 cents a share that matched analysts’ estimates.

“Our job is to deliver earnings growth each and every quarter, and that’s what we’re focused on doing,” Richard Rubino, the company’s chief financial officer, said today in an interview.

Pharmacy benefit managers are in a temporary “lull” because there won’t be many generic drugs introduced this year, Henderson said. Next year will be “great” for the industry, partly because generic forms of Pfizer Inc.’s Lipitor, the world’s biggest-selling drug, will become available after the medication loses patent protection in November of this year, he said.

To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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