Medco Health Solutions Inc.'s fourth-quarter net income rose 12 percent, as gains from generic prescriptions and the pharmacy benefits manager's specialty business helped offset costs from its pending acquisition by Express Scripts Inc.

A generic version of the cholesterol fighter Lipitor added about 3 cents per share to the Franklin Lakes, N.J., company's earnings. Lipitor, the world's top selling drug, lost its patent protection late in the fourth quarter.

Medco said Tuesday its generic dispensing rate climbed 2.5 percentage points in the quarter to 74.7 percent of total prescription volume. Generic drugs are less expensive than their brand-name counterparts, so they can hurt revenue for pharmacy benefits managers, or PBMs, but improve profit margins.

Overall, Medco reported net income of $424.4 million, or $1.08 per share, in the quarter ended Dec. 31. That compares to $378.5 million, or 88 cents per share, in the final quarter of 2010.

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