Termination of 1945 Merck Consent Agreement And Medco History

Below, there is a bit of history between Merck and Medco which came about from the 1945 wartime seizure agreement with the Department of Justice.
MEMORANDUM OF THE UNITED STATES IN RESPONSE TO THE MOTION OF MERCK & CO., INC. TO TERMINATE THE CONSENT DECREE

Where is Medco stock traded and what is its ticker symbol and CUSIP number?
	We trade on the New York Stock Exchange under the ticker symbol: MHS. Medco's CUSIP number is 58405U102.

When did Medco go public?
	Medco stock started trading on August 20, 2003.

What is the relationship between Merck and Medco?

Medco was a wholly owned subsidiary of Merck & Co., Inc., a global pharmaceutical company, from 1993 until Medco was spun-off as an independent publicly traded entity in August 2003. Merck is one of the many major pharmaceutical manufacturer's with whom Medco has a customary rebate agreement. On February 28, 2006, following arms-length negotiations, the managed care agreement that the Company had entered into with Merck while it was a wholly-owned subsidiary of Merck was terminated as of April 1, 2006. The liquidated damages provisions contained in the managed care agreement, under which the Company could have been required to pay liquidated damages if the Company's Merck-related market share declined below specified levels, will no longer apply.

Why did Merck separate Medco from its business?

The board of directors of Merck believes that the separation of Medco from Merck will enhance the success of both Merck and Medco, and thereby maximize stockholder value over the long term for each company, by: enabling each company to continue to pursue its unique and focused strategy; and enabling investors to evaluate the financial performance, strategies and other characteristics of Merck and Medco separately in comparison to companies within their respective industries

Does Medco plan to pay dividends?
	Medco currently does not pay dividends and does not plan to pay dividends in the foreseeable future.

Can I purchase or sell shares directly through Medco?
	Medco does not have a direct purchase or sales plan.

How many shares of Medco did I receive as a result of the Spin-Off from Merck?
	Merck's board of directors set a record date of August 12, 2003 for the transaction. If you owned Merck shares as of this date, you automatically received .1206 shares of Medco common stock for every one share of Merck common stock held on the record date.

What are the U.S. federal income tax consequences of the distribution to Merck stockholders (cost basis)?

For Important U.S. Federal Income Tax Information concerning the Medco Health Solutions, Inc. Stock Distributionplease click here for the shareholder letter. Based on the ruling that Merck received from the U.S. Internal Revenue Service, or IRS, you will not recognize a gain or loss on the receipt of shares of Medco common stock in the spin-off, except to the extent you receive cash in lieu of fractional shares. Your tax basis in your Merck common stock will be apportioned between your Merck common stock and the Medco common stock received in the distribution in accordance with their relative fair market values.