Express Scripts buying Medco for $29.1 billion
The top two U.S. companies managing prescription drug benefits are uniting in a $29.1 billion deal they say will help achieve key goals of the health care overhaul: reining in costs and improving patients' health.
Express Scripts Inc. announced an agreement Thursday to buy larger rival Medco Health Solutions Inc. Together, they would handle the prescriptions of about 135 million people, more than one in three Americans.
That will give them even more clout in demanding discounts from drugmakers, who are dealing with falling or stagnant revenue as an unprecedented number of blockbuster drugs taken daily by millions is getting cheaper generic competition.
Pharmacy benefit managers process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies, acting as middlemen between employers offering prescription drug benefits and drugmakers. They also hold down costs by extracting discounts and rebates from drugmakers, using tiered copayments that nudge patients to buy generics or the lowest-cost brand names, and reminding patients to take medicines as scheduled to limit costly complications.
Together, Express Scripts and Medco handled more than 1.7 billion prescriptions in 2010 and reported almost $110 billion in revenue, although Medco recently lost several contracts covering millions of people. They have razor-thin profit margins.
Greece gets new bailout with private sector help
BRUSSELS (AP) _ Eurozone leaders on Thursday agreed to a sweeping deal that will grant Greece a massive new bailout _ but likely make it the first euro country to default _ and radically reshape the currency union's rescue fund, allowing it to act pre-emptively when crises build up.
The eurozone countries and the International Monetary Fund will give Greece a second bailout worth $155 billion, on top of the $159 billion already granted a year ago.
Banks and other private investors will contribute some $71 billion to the rescue package by either rolling over Greek bonds that they hold, swapping them for new ones with lower interest rates or selling the bonds back to Greece at a low price.
More people sought unemployment benefits last week
WASHINGTON (AP) _ More people applied for unemployment benefits last week, evidence that layoffs are rising and the job market is weak.
Applications for unemployment benefits rose by 10,000 to a seasonally adjusted 418,000, the Labor Department said Thursday. The four-week average, a less volatile measure, dipped to 421,250.
Applications have topped 400,000 for 15 straight weeks, a sign of sluggish hiring. Applications had fallen in February to 375,000, a level that signals healthy job growth. They stayed below 400,000 for two months. But applications surged to an eight-month high of 478,000 in April and have declined slowly since then.
Consumers have pulled back on spending this year, besieged by high unemployment, stagnant wages, and high gasoline prices. That has slowed growth.
Leading indicators rise, signal slow growth
NEW YORK (AP) _ A private research group forecast that the economy will grow slowly as summer turns into fall _ if U.S. politicians can agree to raise the amount the government can borrow.
The political impasse means the government could default on its debts next month, potentially setting off a financial crisis. If a deal is reached by an Aug. 2 deadline, that "headwind" would recede, and the economy should resume its modest recovery, said Conference Board economist Ken Goldstein.
The Conference Board said Thursday that its index of leading economic indicators rose 0.3 percent in June. The index had rebounded 0.8 percent in May after dropping 0.3 percent in April. The April decline was the first since June 2010.
The June rise in leading indicators suggests that the recent slowdown in growth won't worsen into a recession over the next few months, even with high unemployment and a weak housing market.
iFraud: Entire Apple stores being faked in China
BEIJING (AP) _ It looks almost exactly like a sleek Apple store. Sales assistants in blue T-shirts with the company's logo chat with customers. Signs advertising the iPad 2 hang on the white walls. Outside, the famous logo sits next to the words "Apple Store" _ one of the few clues that the whole thing is a fake.
China, long known for producing counterfeit consumer gadgets, software and brand name clothing, has reached a new piracy milestone _ fake Apple stores.
An American who lives in Kunming in southern Yunnan province said Thursday that she and her husband stumbled on three shops masquerading as bona fide Apple stores in the city a few days ago. She took photos and posted them on her BirdAbroad blog.
The 27-year-old blogger, who spoke on condition of anonymity, said the setup of the stores was so convincing that the employees themselves seemed to believe they worked for Apple.
Regulators balk at demands for foreclosure reports
WASHINGTON (AP) _ Banking regulators refused to commit to releasing details of their investigations into illegal foreclosure practices by the nation's largest banks.
Appearing before a Senate panel Thursday, Federal Reserve Chairman Ben Bernanke and Acting Comptroller of the Currency John Walsh said they had not decided whether to release reports on illegal practices by individual banks.
Sen. Robert Menendez, D-N.J, had pressed them to release the reports, banks' individual action plans and agreements with the consultants that investigated the banks. Menendez cited a report by The Associated Press this week that said banks are continuing to foreclose without doing the necessary paperwork, eight months after they had promised to stop.
Microsoft's fourth-quarter profit climbs, Windows revenue dips
SAN FRANCISCO (AP) _ Microsoft Corp. reported record fourth-quarter revenue Thursday, helped by strong sales of its Office software suite.
But revenue from the division that includes Microsoft's Windows operating system fell 1 percent from the same time last year, marking the third straight quarter of decline. The drop suggests that consumers are buying fewer computers that use Microsoft's software. It may also indicate that more consumers are moving to tablet computers, rather than upgrading their existing laptop and desktop computers.
Total revenue for the fiscal fourth quarter rose 8 percent from last year to $17.4 billion, higher than the $17.2 billion that analysts polled by FactSet expected.
Growing Office sales helped revenue from the company's largest division climb nearly 8 percent to $5.78 billion. Microsoft said its results were also aided by higher software and server sales to businesses and the popularity of its Xbox 360 video game console and Kinect motion-sensing game control device.
However, sales in the company's Windows and Windows Live division were soft, dipping to $4.74 billion from $4.78 billion. Investors have been focused on this segment of the business amid concern that the increasing popularity of tablets like Apple Inc.'s iPad are cutting into sales of computers that use Microsoft's ubiquitous software.
AMD rides new chip to second-quarter profit
SAN FRANCISCO (AP) _ A new chip from Advanced Micro Devices Inc. combining general-purpose and graphics capabilities showed early signs of success as the company's earnings for the latest quarter were slightly better than what Wall Street had expected.
AMD, the No. 2 maker of computer microprocessors, sold more than 7 million of the "accelerated processing units" in the second quarter, more than half the total since they went on sale in November. The chips represent the kind of creative risks that allow AMD to remain a technological trendsetter despite its perpetual underdog status against Intel Corp.
Fare hikes help United Continental and US Airways
Fare increases gave United Continental and US Airways profitable quarters despite the financial damage the airlines suffered from sharply higher fuel prices.
On Thursday both airlines reported smaller second-quarter profits than a year ago _ down almost 12 percent at United Continental, and a 67 percent drop at US Airways.
Airlines have put growth plans on the shelf and, especially at United, focused on getting more business travelers on board. That has allowed the airlines to raise fares. On Thursday, some airlines attempted a fare increase of up to $20 per round-trip.
PepsiCo's second-quarter earnings up, plans to boost prices
PURCHASE, New York (AP) _ PepsiCo Inc.'s earnings report on Thursday told two familiar story lines.
One is of an American company benefiting from strong growth in new markets worldwide at a time when U.S. customers continue to cut back on spending. The other is of a firm raising prices on those same customers during a slow economic recovery to keep up with higher costs for ingredients, fuel and aluminum.
The maker of such products as Mountain Dew, Diet Pepsi and Lay's potato chips said revenue for Asia, the Middle East and Africa grew 17 percent, and revenue for Latin American food grew 18 percent. Meanwhile, revenue for Frito-Lay snacks in North America grew 3 percent, and revenue for Quaker oatmeal products in North America was flat.
Wal-Mart agrees to share data with Nielsen
NEW YORK (AP) _ The world's largest retailer, Wal-Mart Stores Inc., has agreed to resume sharing consumer data with a major market research firm, a move that could help other retailers, as well as manufacturers, better understand how Americans shop and could influence what appears on store shelves.
Most U.S. food, drug, discount and convenience chains provide Nielsen Holdings N.V. with sales data, but Wal-Mart is considered the single most important bellwether of consumer spending because it accounts for nearly 10 percent of all nonautomotive retail dollars spent in the U.S.
About 100 million shoppers visit Wal-Mart stores in the U.S. each week. The company generated net revenue of $419 billion worldwide in its latest fiscal year.
The agreement it announced Thursday with Nielsen ends a decade-long break in their relationship.
By The Associated Press(equals)
The Dow Jones industrial average rose 152.50 points, or 1.2 percent, to close at 12,724.41.
The S&P 500 index rose 17.96 points, or 1.4 percent, to 1,343.80. The Nasdaq composite index rose 20.20 points, or 0.7 percent, to 2,834.43.
Benchmark West Texas Intermediate crude for August delivery rose 73 cents to settle at $99.13 per barrel on the New York Mercantile Exchange. It reached $100.16 earlier in the day. Brent crude, which is used to price many international varieties, fell 64 cents to settle at $117.51 per barrel on the ICE Futures exchange.
In other Nymex trading for August contracts, heating oil lost 1.92 cents to settle at $3.0992 per gallon and gasoline futures lost 4.75 cents to settle at $3.0995 per gallon. Natural gas dropped 10.7 cents to settle at $4.362 per 1,000 cubic feet.