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Express Scripts, Inc. Q3 2007 Earnings Call Transcript

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2007-10-25 21:48:47.0

Tags: Express Scripts Inc.

Question-and-Answer Session

[Operator Instructions]. Our first question will come from the line of Larry Marsh with Lehman Brothers. Please go ahead.

Lawrence Marsh - Lehman Brothers

Thanks, George and Ed. I certainly can’t complain about the PBM business, another great quarter, so I will ask about infusion. Are you giving us any sense of how big that business is now from a revenue standpoint? And towards the end of the last quarter, you mentioned that you thought the infusion business was interesting, given the number and types of drugs in the pipeline. What's causing you to maybe change your view here? And do you just see this as company specific issues or is there anything industry-wide now that would cause you to re-evaluate the infusion exposure?

George Paz - Chairman, President and Chief Executive Officer

As you probably know, Larry, the infusion business is a very fragmented business and there are many, many providers in almost every given regional location. And therefore, a lot of the leverage exists on the side of the manage care plans and it's very difficult to gain the leverage that we need in order to drive our value proposition for our shareholders.

I do believe that there is a role for infusion as you look out in the future. I am not sure though that you have to have the nurses that actually go to the homes to ultimately have the solution for the specially drugs that are in the pipeline. We are currently evaluating that. It's painful believe me to watch our high-growth business being pulled back by our results from our infusion business. There is a very strong pipeline of infusible drugs, and a lot of these drugs are going to be more like the dialysis situation where you can go to an infusion suite and the people aren’t bedridden at home and have to have nurses come to their house. They can in fact just go to suites and have this business taken care of.

The infusion business today is very difficult because you spend a tremendous amount of time and cost and non-value added activities such as traveling to the patient's own, down time as you get the patients in from the clinics and the hospitals. So, there is a lot of administrative burden and costs that make this business very difficult. What we hope to do is continue to evaluate this over the next quarter or two and come back to our shareholders with a solution. We are not ruling things out, but we are actively analyzing what move us in the best interest of our shareholders.

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