* Drugs are Nexium, Prilosec, Plendil, Toprol XL-Astra
* Medco shares down 0.9 pct, Astra little changed
(Adds Express Scripts, analyst comment)
By Lewis Krauskopf
NEW YORK, July 26 Medco Health Solutions Inc
MHS.N and AstraZeneca Plc (AZN.L) were subpoenaed by the U.S.
Department of Justice over their relationship involving four of
AstraZeneca's drugs, including widely used acid reflux
medicines Nexium and Prilosec.
The companies said separately on Tuesday they received the
subpoenas this month. They were issued from the U.S. attorney's
office for the District of Delaware, the state which is also
home to AstraZeneca's U.S. headquarters.
News of the investigation comes at a sensitive time for
Medco, which agreed last week to be bought by Express Scripts
Inc (ESRX.O) for $29.1 billion. [ID:nN1E76K024]
The deal -- which combines two of the three largest
pharmacy benefit managers -- is projected to have a difficult
road to winning U.S. antitrust clearance, so any further
regulatory issues could add to the roadblocks.
According to London-based AstraZeneca, the government wants
documents relating to its relationship with Medco involving
Nexium and Prilosec, as well as blood-pressure medicines Toprol
XL and Plendil.
Nexium ranked as the fourth-biggest selling drug in the
world last year, according to pharmaceutical information
company IMS Health Inc, while Prilosec was once a major product
before losing patent protection and becoming available as a
In March, Medco said it received a subpoena from the U.S.
Securities and Exchange Commission related to an ongoing probe
of Calpers -- the California Public Employees' Retirement
The SEC requested documents pertaining to a one-time
Calpers board member, who also was a placement agent who
consulted for Medco and other companies that won business at
Medco lost the contract with Calpers earlier this year, a
setback then compounded by two other significant account losses
that analysts said might have led Medco to strike its deal with
An Express Scripts spokesman declined to comment on any
specific legal matters facing Medco, but said the company did
significant due diligence around Medco's legal proceedings.
Analysts have put the odds of the Express-Medco deal
winning regulatory approval at anywhere from 40 percent to 80
Leerink Swann analyst David Larsen, in an report issued on
Tuesday discussing the antitrust issues, projected the deal had
a roughly 70 percent chance of closing and that Express could
likely satisfy some regulatory concerns by divesting
conflicting pieces of business.
Pharmacy benefit managers administer drug benefits for
employers and health plans and operate large mail-order
Medco shares fell 0.9 percent to $64.92 in afternoon
trading on the New York Stock Exchange, while Astra shares in
London were barely changed. Express Scripts shares were off 0.8
percent at $56.18 on Nasdaq.
(Reporting by Lewis Krauskopf, additional reporting by Diane
Bartz in Washington and Esha Dey in Bangalore; editing by
Joyjeet Das, Gopakumar Warrier, Derek Caney and Andre Grenon)