Medco expands research efforts with $730 million deal for research adviser United BioSource

Medco Health will buy United BioSource for $730M

NEW YORK — Pharmacy benefits manager Medco Health Solutions Inc. said Monday it will buy United BioSource Corp., which helps companies run studies of newly-approved drugs and medical devices, for $730 million in cash.

United BioSource, based in Bethesda, Md., devises strategies intended to help minimize the risks associated with new drugs or devices. They can include medication guides, package inserts, and communication with health care providers. Regulators often require these actions when approving a new drug, particularly a biologic drug.

United BioSource also works on other issues including clinical trials — usually of a product that has recently been approved — to demonstrate the safety of the newer product or compare it to competing products. It also helps clients perform research on costs, safety, health insurance coverage, reimbursement, and medical publications and communications.

United BioSource was founded in 2003. The companies say United BioSource will report about $280 million in revenue in 2010.

The deal is expected to close in the third quarter and add slightly to Medco’s profit in 2011.

Medco, based in Franklin Lakes, N.J. is the country’s largest pharmacy benefits manager, but in recent years it has expanded its ability to do research and compare the effectiveness of different drugs. It recently created the Medco Research Institute to expand its research work.

In midday trading, Medco shares fell $1.07, or 2.3 percent, to $45.85.