Merck to Sell Part of Medco Unit to Public

Merck & Co. plans to sell part of its Medco pharmacy business to the public as the second-biggest U.S. pharmaceutical company concentrates on higher-margin prescription drugs.

Analysts estimate all of Medco could sell for $6 billion to $15billion. Merck paid $6 billion in 1993 for the pharmacy business, which acts as a middleman between drug makers and health-care insurance plans.

Merck yielded to shareholder pressure to sell Medco years after Eli Lilly & Co. and GlaxoSmithKline sold similar units, analysts said. Merck said last month it didn’t expect profit to grow in 2002 because of competition from generic drugs and lower-than-expected sales of its Vioxx painkiller. The share offering may help Merck fund acquisitions to restart that growth.

Merck shares rose 52 cents to close at $57.52 on the New York Stock Exchange.