Medco Health's separation from Merck will be overseen by former WellChoice Chief Operating Officer David Snow.

Medco named Snow president and CEO, effective March 31. The current head of Merck's PBM division, Richard Clark, will remain as chairman through the transition. Clark previously announced his plans to return to the Merck side of the business as part of the spin-off of the pharmacy benefit management operations (¹ ³ Also see "Medco IPO Delay: Merck Trades Gross Margin For Cloudy Rebate Calculations" - Pink Sheet, 15 July, 2002., p. 28).

Snow's background, 25 years in health insurance and managed care, should help Medco underscore the break with the period of Merck ownership.

Clark - a longtime Merck veteran - gained experience in manufacturing prior to joining Medco in 1997. He succeeded Per Lofberg as CEO of Medco in 2000 (² Also see "Merck-Medco Management Transition Complete: Clark Succeeds Lofberg" - Pink Sheet, 4 December, 2000., p. 17). Lofberg was the last holdover from the pre-Merck management team assembled by former Medco CEO Marty Wygod.

Snow spent four years with Empire Blue Cross/Blue Shield (an AdvancePCS customer) during the period when it shifted to a for-profit model and went public under the name WellChoice. He was previously an exec VP with Oxford Health Plans, CEO of Managed Health Care Systems and senior VP at American International Health Care.

Snow's experience with the Empire IPO should prove useful as Medco goes through the spin-off period. The company filed an IPO for the division last year but withdrew it (¹ ³ Also see "Medco IPO Delay: Merck Trades Gross Margin For Cloudy Rebate Calculations" - Pink Sheet, 15 July, 2002., p. 28). Merck intends to complete the spin-off by mid-2003.

The IPO filing provided a wealth of ammunition for the company's critics to use in questioning Medco's independence from Merck, including details about formulary agreements for Zocor .

Snow inherits the PBM's negotiations with the Philadelphia U.S. Attorney's office. Medco has responded to Associate U.S. Attorney Jim Sheehan on the case outlined against it in August, but a resolution has not yet been announced (⁴ [A#00640340012], p. 14). An upcoming IG compliance guide will also define PBM practices (see ⁵ Also see "IG Compliance Guide Will Change PBM Rebate Policies, AdvancePCS Says" - Pink Sheet, 24 March, 2003.).

Medco Lets Snow Reign: CEO David Snow Joins PBM From WellChoice

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