The big pharmacy benefits manager reported net income rose 29 percent, to $228.8 million, or 77 cents, from $176.8 million, or 57 cents, because its selling a higher proportion of generic medicines. These include new copycat versions of Merck’s Zocor. Sales rose 1.2 percent to $10.9 billion.

“These strong results validate a sound strategy complemented by disciplined execution,” said David Snow, Medco’s affable but no-nonsense ceo, in a statement. “We are accelerating innovations that encourage generic utilization, enhance specialty pharmacy, optimize the efficiencies of mail, support a range of solutions for seniors and redefine the standard for clinical excellence – all of which benefit our clients, members and shareholders.”

Wall Street expects Medco to grab some new business as CVS and Express Scripts fight over Caremark, which has to be a distraction. And the ongoing shift to still more generics also bodes well, which is one reason that Medco raised its 2007 guidance this morning by nearly 20 cents a share.

[tags]Medco[/tags]