|   |
|--------|

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

| x  | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934For                the quarterly period ended June 30, 2007.                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| o       | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934For                the transition period from ____________ to _____________.  |

**EXPRESS      SCRIPTS, INC.**

| **Delaware**(State                of Incorporation)                                                       | **43-1420563**(I.R.S.                employer identification no.) |
|----------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
| **One                Express Way, St. Louis, MO**(Address                of principal executive offices)  | **63121**(Zip                Code)                                |

| Common                stock outstanding as of June 30, 2007: | 257,851,000 |   | Shares |
|--------------------------------------------------------------|-------------|--------|--------|

|   |
|--------|

----

----

|                                                     |
|----------------------------------------------------------|
|  PART                I.  FINANCIAL INFORMATION |

| **Item                1.** | **Financial                Statements** |
|----------------------------|-----------------------------------------|

| **EXPRESS                SCRIPTS, INC.**                |   |
|---------------------------------------------------------|--------|
| **Unaudited                Consolidated Balance Sheet** |   |

|                                                                                                    |                              |     |                             |
|---------------------------------------------------------------------------------------------------------|-----------------------------------|----------|---------------------------------------|
|                                                                                                    | **June                30,**  |     | **December                31,**  |
| *(in                millions, except share data)*                                                       | **2007**                     |     | **2006**                         |
| Assets                                                                                                  |                              |     |                                  |   |   |
| Current                assets:                                                                          |                              |     |                                  |   |   |
| Cash                and cash                equivalents                                                 | $                                 | 111.2    |                                  |   | $ | 131.0 |   |
| Receivables,                net                                                                         |                              | 1,303.9  |                                  |   |   | 1,334.4 |   |
| Inventories                                                                                             |                              | 198.4    |                                  |   |   | 194.6 |   |
| Deferred                taxes                                                                           |                              | 107.1    |                                  |   |   | 90.9 |   |
| Prepaid                expenses and other current                assets                                 |                              | 24.2     |                                  |   |   | 21.2 |   |
| Total                current                assets                                                      |                              | 1,744.8  |                                  |   |   | 1,772.1 |   |
| Property                and equipment, net                                                              |                              | 198.5    |                                  |   |   | 201.4 |   |
| Goodwill                                                                                                |                              | 2,688.0  |                                  |   |   | 2,686.0 |   |
| Other                intangible assets, net                                                             |                              | 360.5    |                                  |   |   | 378.4 |   |
| Other                assets                                                                             |                              | 41.1     |                                  |   |   | 70.2 |   |
| Total                assets                                                                             | $                                 | 5,032.9  |                                  |   | $ | 5,108.1 |   |
|                                                                                                    |                              |     |                                  |   |   |   |   |
| Liabilities                and Stockholders’ Equity                                               |                              |     |                                  |   |   |   |   |
| Current                liabilities:                                                                     |                              |     |                                  |   |   |   |   |
| Claims                and rebates                payable                                                | $                                 | 1,198.3  |                                  |   | $ | 1,275.7 |   |
| Accounts                payable                                                                         |                              | 570.2    |                                  |   |   | 583.4 |   |
| Accrued                expenses                                                                         |                              | 346.4    |                                  |   |   | 390.2 |   |
| Current                maturities of long-term                debt                                      |                              | 220.1    |                                  |   |   | 180.1 |   |
| Total                current                liabilities                                                 |                              | 2,335.0  |                                  |   |   | 2,429.4 |   |
| Long-term                debt                                                                           |                              | 1,700.3  |                                  |   |   | 1,270.4 |   |
| Other                liabilities                                                                        |                              | 310.2    |                                  |   |   | 283.4 |   |
| Total                liabilities                                                                        |                              | 4,345.5  |                                  |   |   | 3,983.2 |   |
|                                                                                                    |                              |     |                                  |   |   |   |   |
| Stockholders’                Equity:                                                              |                              |     |                                  |   |   |   |   |
| Preferred                stock, 5,000,000 shares                authorized, $0.01 par value per share;  |                              |     |                                  |   |   |   |   |
| and                no shares issued and                outstanding                                      |                              | -        |                                  |   |   | - |   |
| Common                stock, 1,300,000,000 shares                authorized, $0.01 par value per share; |                              |     |                                  |   |   |   |   |
| shares                issued:  318,867,000 and 159,442,000,                respectively;      |                              |     |                                  |   |   |   |   |
| shares                outstanding:  257,851,000 and 135,650,000,                respectively  |                              | 3.2      |                                  |   |   | 1.6 |   |
| Additional                paid-in                capital                                                |                              | 538.1    |                                  |   |   | 495.3 |   |
| Accumulated                other comprehensive                income                                    |                              | 15.0     |                                  |   |   | 11.9 |   |
| Retained                earnings                                                                        |                              | 2,303.5  |                                  |   |   | 2,017.3 |   |
|                                                                                                    |                              | 2,859.8  |                                  |   |   | 2,526.1 |   |
| Common                stock in treasury at cost,                61,016,000 and 23,792,000               |                              |     |                                  |   |   |   |   |
| shares,                respectively                                                                     |                              | (2,172.4 | )                                     |   |   | (1,401.2 | ) |
| Total                stockholders’                equity                                          |                              | 687.4    |                                  |   |   | 1,124.9 |   |
| Total                liabilities and                stockholders’ equity                          | $                                 | 5,032.9  |                                  |   | $ | 5,108.1 |   |
|                                                                                                    |                              |     |                                  |   |   |   |   |

*See      accompanying Notes to Unaudited Consolidated Financial      Statements*

----

**EXPRESS      SCRIPTS, INC.**

**Unaudited      Consolidated Statement of Operations**

|                                                                    | **Three                Months Ended**  |    | **Six                Months Ended**  |
|-------------------------------------------------------------------------|---------------------------------------------|---------|-------------------------------------------|
|                                                                    | **June                30,**            |    | **June                30,**          |
| *(in                millions, except per share data)*                   | **2007**                               |    | **2006**                             |   | **2007**  |   | **2006**  |
|                                                                    |                                        |    |                                      |   |   |   |   |   |   |   |   |
| Revenues                1                                               | $                                           | 4,600.4 |                                      |   | $ | 4,421.1 |   |   | $ | 9,139.9 |   |   | $ | 8,801.1 |   |
| Cost                of revenues 1                                       |                                        | 4,157.0 |                                      |   |   | 4,057.5 |   |   |   | 8,270.4 |   |   |   | 8,092.9 |   |
| Gross                profit                                             |                                        | 443.4   |                                      |   |   | 363.6 |   |   |   | 869.5 |   |   |   | 708.2 |   |
| Selling,                general and administrative                      |                                        | 183.1   |                                      |   |   | 171.1 |   |   |   | 355.8 |   |   |   | 332.2 |   |
| Operating                income                                         |                                        | 260.3   |                                      |   |   | 192.5 |   |   |   | 513.7 |   |   |   | 376.0 |   |
| Other                (expense) income:                                  |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-operating                gains (charges),                net        |                                        | 4.2     |                                      |   |   | - |   |   |   | (18.8 | ) |   |   | - |   |
| Undistributed                loss from joint                venture     |                                        | (0.4    | )                                         |   |   | (0.3 | ) |   |   | (0.8 | ) |   |   | (0.8 | ) |
| Interest                income                                          |                                        | 2.6     |                                      |   |   | 4.0 |   |   |   | 5.4 |   |   |   | 9.0 |   |
| Interest                expense                                         |                                        | (25.6   | )                                         |   |   | (23.7 | ) |   |   | (47.8 | ) |   |   | (44.2 | ) |
|                                                                    |                                        | (19.2   | )                                         |   |   | (20.0 | ) |   |   | (62.0 | ) |   |   | (36.0 | ) |
| Income                before income taxes                               |                                        | 241.1   |                                      |   |   | 172.5 |   |   |   | 451.7 |   |   |   | 340.0 |   |
| Provision                for income taxes                               |                                        | 88.4    |                                      |   |   | 64.7 |   |   |   | 165.3 |   |   |   | 127.5 |   |
| Net                income                                               | $                                           | 152.7   |                                      |   | $ | 107.8 |   |   | $ | 286.4 |   |   | $ | 212.5 |   |
|                                                                    |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                earnings per share:                                | $                                           | 0.58    |                                      |   | $ | 0.38 |   |   | $ | 1.07 |   |   | $ | 0.74 |   |
|                                                                    |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average number of common shares                 |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|                   outstanding during the period - Basic EPS   |                                        | 263.6   |                                      |   |   | 282.4 |   |   |   | 267.6 |   |   |   | 287.6 |   |
|                                                                    |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per share:                              | $                                           | 0.57    |                                      |   | $ | 0.38 |   |   | $ | 1.06 |   |   | $ | 0.73 |   |
|                                                                    |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average number of common shares                 |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|                   outstanding during the period - Diluted EPS |                                        | 267.0   |                                      |   |   | 286.8 |   |   |   | 271.1 |   |   |   | 292.4 |   |
|                                                                    |                                        |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |

|  * 1* | *Excludes              estimated retail pharmacy co-payments of $943.9 and $1,045.7 for the              three              months ended June 30, 2007 and 2006, respectively, and $1,932.1 and              $2,266.5 the six months ended June 30, 2007 and 2006,              respectively.  These are amounts we instructed retail pharmacies              to collect from members.  We have no information regarding              actual co-payments collected.* |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|            | *See                accompanying Notes to Unaudited Consolidated Financial                Statements*                                                                                                                                                                                                                                                                                                                                                                                         |

*  *

----

| **EXPRESS                SCRIPTS, INC.**                                                                    |
|-------------------------------------------------------------------------------------------------------------|
| **Unaudited                Consolidated Statement of Changes in Stockholders’                Equity** |

|                                                                               | Number                of Shares |   |                Amount        |   |
|------------------------------------------------------------------------------------|---------------------------------|--------|-----------------------------------|--------|
|   *(in                millions)*                                         | CommonStock                     |   | Common                Stock  |   | AdditionalPaid-inCapital  |   |   Accumulated                Other                Comprehensive                Income |   | Retained                Earnings |   | TreasuryStock  |   | Total  |   |
| Balance                at December 31, 2006                                        | 159.4                           |   |                              | $      | 1.6 |   |   | $ | 495.3 |   |   | $ | 11.9 |   |   | $ | 2,017.3 |   |   | $ | (1,401.2 | ) |   | $ | 1,124.9 |   |
| Comprehensive                income:                                               |                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                          | -                               |   |                              |   | - |   |   |   | - |   |   |   | - |   |   |   | 286.4 |   |   |   | - |   |   |   | 286.4 |   |
| Other                comprehensive                income:                          |                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign                currency                                                    |                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| translation                adjustment                                              | -                               |   |                              |   | - |   |   |   | - |   |   |   | 5.1 |   |   |   | - |   |   |   | - |   |   |   | 5.1 |   |
|                      Realized gains on available-         |                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for-sale                securities; net of                taxes                    |                            |   |                              |   |   |   |   |   |   |   |   |   | (2.0 | ) |   |   |   |   |   |   |   |   |   |   | (2.0 | ) |
| Comprehensive                income                                                | -                               |   |                              |   | - |   |   |   | - |   |   |   | 3.1 |   |   |   | 286.4 |   |   |   | - |   |   |   | 289.5 |   |
| Stock                split in form of stock                dividend                | 159.4                           |   |                              |   | 1.6 |   |   |   | (1.6 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Treasury                stock                acquired                              | -                               |   |                              |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (826.7 | ) |   |   | (826.7 | ) |
| Changes                in stockholders’                equity                |                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       related                to employee stock plans | 0.1                             |   |                              |   | - |   |   |   | 44.4 |   |   |   | - |   |   |   | - |   |   |   | 55.5 |   |   |   | 99.9 |   |
|     Cumulative                effect of adoption of FIN 48     | -                               |   |                              |   | - |   |   |   | - |   |   |   | - |   |   |   | (0.2 | ) |   |   | - |   |   |   | (0.2 | ) |
| Balance                at June 30, 2007                                            | 318.9                           |   |                              | $      | 3.2 |   |   | $ | 538.1 |   |   | $ | 15.0 |   |   | $ | 2,303.5 |   |   | $ | (2,172.4 | ) |   | $ | 687.4 |   |

*    See      accompanying Notes to Unaudited Consolidated Financial      Statements*

----

| **EXPRESS                SCRIPTS, INC.**                                         |
|----------------------------------------------------------------------------------|
| **Unaudited                Consolidated Statement of Cash                Flows** |

|                                                                                | **Six                Months Ended**  |
|-------------------------------------------------------------------------------------|-------------------------------------------|
|                                                                                | **June                30,**          |
| *(in                millions)*                                                      | **2007**                             |   | **2006**  |
| Cash                flows from operating activities:                                |                                      |   |   |   |   |
| Net                income                                                           | $                                         | 286.4 |   |   | $ | 212.5 |   |
| Adjustments                to reconcile net                income to net cash       |                                      |   |   |   |   |   |   |
| provided                by operating                activities:                     |                                      |   |   |   |   |   |   |
| Depreciation                and                amortization                         |                                      | 52.1 |   |   |   | 51.9 |   |
| Non-cash                adjustments to net                income                    |                                      | 23.5 |   |   |   | 13.4 |   |
| Changes                in operating assets and                liabilities:          |                                      |   |   |   |   |   |   |
| Claims                and rebates                payable                            |                                      | (77.4 | ) |   |   | (175.8 | ) |
| Other                net changes in operating                assets and liabilities |                                      | (33.3 | ) |   |   | 91.8 |   |
| Net                cash provided by operating activities                            |                                      | 251.3 |   |   |   | 193.8 |   |
|                                                                                |                                      |   |   |   |   |   |   |
| Cash                flows from investing activities:                                |                                      |   |   |   |   |   |   |
| Purchases                of property and                equipment                   |                                      | (29.9 | ) |   |   | (20.7 | ) |
| Sale                of marketable                securities                         |                                      | 34.2 |   |   |   | - |   |
| Other                                                                               |                                      | (0.6 | ) |   |   | (0.1 | ) |
| Net                cash provided by (used in) investing activities                  |                                      | 3.7 |   |   |   | (20.8 | ) |
|                                                                                |                                      |   |   |   |   |   |   |
| Cash                flows from financing activities:                                |                                      |   |   |   |   |   |   |
| Proceeds                from long-term                debt                          |                                      | 600.0 |   |   |   | - |   |
| Repayment                of long-term                debt                           |                                      | (80.1 | ) |   |   | (80.1 | ) |
| Repayment                of revolving credit                line, net               |                                      | (50.0 | ) |   |   | 285.0 |   |
| Tax                benefit relating to employee                stock compensation   |                                      | 39.3 |   |   |   | 27.5 |   |
| Treasury                stock                acquired                               |                                      | (826.7 | ) |   |   | (707.7 | ) |
| Net                proceeds from employee stock                plans                |                                      | 42.1 |   |   |   | 19.7 |   |
| Deferred                financing                fees                               |                                      | (1.3 | ) |   |   | (0.3 | ) |
| Net                cash used in financing activities                                |                                      | (276.7 | ) |   |   | (455.9 | ) |
|                                                                                |                                      |   |   |   |   |   |   |
| Effect                of foreign currency translation adjustment                    |                                      | 1.9 |   |   |   | 0.9 |   |
|                                                                                |                                      |   |   |   |   |   |   |
| Net                decrease in cash and cash equivalents                            |                                      | (19.8 | ) |   |   | (282.0 | ) |
| Cash                and cash equivalents at beginning of period                     |                                      | 131.0 |   |   |   | 477.9 |   |
| Cash                and cash equivalents at end of period                           | $                                         | 111.2 |   |   | $ | 195.9 |   |

* See      accompanying Notes to      Unaudited Consolidated Financial Statements*

----

**EXPRESS      SCRIPTS, INC.**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

**Note      1 – Summary of significant accounting policies**

**Note      2 – Non-operating gains (charges), net**

----

**Note      3 – Goodwill and other intangibles**

|                                         | **June                30, 2007**  |    | **December                31, 2006**  |
|----------------------------------------------|----------------------------------------|---------|--------------------------------------------|
|                                         | **Gross****Carrying****Amount**   |    | **Accumulated****Amortization**       |   | **Gross****Carrying****Amount**  |   | **Accumulated****Amortization**  |
| Goodwill                                     |                                   |    |                                       |   |   |   |   |   |   |   |   |
| PBM                (1)                       | $                                      | 1,511.4 |                                       |   | $ | 107.3 |   |   | $ | 1,509.2 |   |   | $ | 107.1 |   |
| SAAS(1)                                      |                                   | 1,283.9 |                                       |   |   | - |   |   |   | 1,283.9 |   |   |   | - |   |
|                                         | $                                      | 2,795.3 |                                       |   | $ | 107.3 |   |   | $ | 2,793.1 |   |   | $ | 107.1 |   |
|                                         |                                   |    |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                intangible assets       |                                   |    |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| PBM                                          |                                   |    |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer                contracts            | $                                      | 244.8   |                                       |   | $ | 91.5 |   |   | $ | 244.2 |   |   | $ | 85.3 |   |
| Other                                        |                                   | 60.3    |                                       |   |   | 49.5 |   |   |   | 61.6 |   |   |   | 49.3 |   |
|                                         |                                   | 305.1   |                                       |   |   | 141.0 |   |   |   | 305.8 |   |   |   | 134.6 |   |
|                                         |                                   |    |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| SAAS                                         |                                   |    |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer                relationships        |                                   | 231.5   |                                       |   |   | 41.4 |   |   |   | 231.5 |   |   |   | 31.0 |   |
| Other                (2)                     |                                   | 9.2     |                                       |   |   | 2.9 |   |   |   | 9.9 |   |   |   | 3.2 |   |
|                                         |                                   | 240.7   |                                       |   |   | 44.3 |   |   |   | 241.4 |   |   |   | 34.2 |   |
| Total                other intangible assets | $                                      | 545.8   |                                       |   | $ | 185.3 |   |   | $ | 547.2 |   |   | $ | 168.8 |   |

| (1)                  | We                have two reportable segments: Pharmacy Benefit Management (“PBM”) and                Specialty and Ancillary Services                (“SAAS”). |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Changes                in other intangible assets are a result of the write-off of                fully-amortized contractual assets, consisting of non-compete agreements                that are no longer in effect. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Note      4 – Common Stock**

**Note      5 – Financing**

| *· *  | Delayed                  draw feature (through December 31, 2007) allowing for interim borrowings                  up to $800.0 million. |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| *· *  | No                  scheduled payments, until the maturity of the                  loan. |
|----------------------|------------------------------------------------------------------------------------------|

----

|  Year                Ended December 31,   |
|----------------------------------------------------------|
|                                                     | 2007 | $ | 100.0 |   |
|                                                     | 2008 |   | 260.1 |   |
|                                                     | 2009 |   | 420.0 |   |
|                                                     | 2010 |   | 1,140.0 |   |
|                                                     | 2011 |   | 0.1 |   |
|                                                     | Thereafter |   | 0.2 |   |
|                                                     |   | $ | 1,920.4 |   |

**Note      6 – Income Taxes**

----

**Note      7 – Earnings per share (reflecting the two-for-one stock split effective June      22, 2007)**

|                                                                                                                                                                                                                        |  **Three                  Months Ended****June                  30,**   | **Six                  Months Ended****June                  30,** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                                                                                                                                                                                                        | **2007**                                                                          | **2006**                                                      | **2007**  | **2006**  |
| Weighted                  average number of common shares                                                                                                                                                                   |                                                                                   |                                                               |   |   |   |   |   |   |
| outstanding                  during the period – Basic EPS(1)                                                                                                                                                         | 263.6                                                                                  |                                                               | 282.4 |   | 267.6 |   | 287.6 |   |
| Dilutive                  common stock equivalents:                                                                                                                                                                         |                                                                                   |                                                               |   |   |   |   |   |   |
| Outstanding                  stock options, “stock-settled” stock appreciation rights (“SSRs”),                  restricted stock units, and executive deferred compensation                  units | 3.4                                                                                    |                                                               | 4.4 |   | 3.5 |   | 4.8 |   |
| Weighted                  average number of common shares                                                                                                                                                                   |                                                                                   |                                                               |   |   |   |   |   |   |
| outstanding                  during the period – Diluted EPS(1)                                                                                                                                                       | 267.0                                                                                  |                                                               | 286.8 |   | 271.1 |   | 292.4 |   |

| (1)   | Excludes                SSRs of 0.2 million for the six months ended June 30,                2007.  These were excluded because their effect was                anti-dilutive. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Note      8 – Stock-based compensation plans (reflecting the two-for-one stock split      effective June 22, 2007)**

----

|   |                                        |                                                 |   |                                               |
|--------|---------------------------------------------|------------------------------------------------------|--------|----------------------------------------------------|
|   |                                        | **Three                Months Ended June 30,**  |   | **Six                Months Ended June 30,**  |
|   |                                        | **2007**                                        |   | **2006**                                      |   | **2007**  |   | **2006**  |
|   | Expected                life of option      | 3-5                years                        |   | 3-5                years                      |   | 3-5                years  |   | 3-5                years  |
|   | Risk-free                interest rate      |  4.8%                                           |   |  4.8%-5.3%                                    |   |  4.5%-5.2% |   |  4.6%-5.3% |
|   | Expected                volatility of stock |  31%                                            |   |  34%                                          |   |  31% |   |  34% |
|   | Expected                dividend yield      | None                                            |   | None                                          |   | None  |   | None  |

**Note      9 – Contingencies**

**Note      10 – Segment reporting**

| ***(in                millions)***                          | **PBM** |    | **SAAS** |   | **Total** |   |
|-------------------------------------------------------------|---------|---------|----------|--------|-----------|--------|
| **For                the three months ended June 30, 2007** |    |    |     |   |      |   |
| Product                revenue:                             |    |    |     |   |      |   |
| Network                revenues                             | $       | 2,376.8 |     | $      | -         |   | $ | 2,376.8 |   |
| Home                delivery revenues                       |    | 1,250.5 |     |   | -         |   |   | 1,250.5 |   |
| Other                revenues                               |    | -       |     |   | 898.4     |   |   | 898.4 |   |
| Service                revenues                             |    | 42.0    |     |   | 32.7      |   |   | 74.7 |   |
| Total                revenues                               |    | 3,669.3 |     |   | 931.1     |   |   | 4,600.4 |   |
| Depreciation                and amortization expense        |    | 16.8    |     |   | 9.4       |   |   | 26.2 |   |
| Operating                income                             |    | 249.8   |     |   | 10.5      |   |   | 260.3 |   |
| Non-operating                gains                          |    |    |     |   |      |   |   | 4.2 |   |
| Undistributed                loss from joint venture        |    |    |     |   |      |   |   | (0.4 | ) |
| Interest                income                              |    |    |     |   |      |   |   | 2.6 |   |
| Interest                expense                             |    |    |     |   |      |   |   | (25.6 | ) |
| Income                before income taxes                   |    |    |     |   |      |   |   | 241.1 |   |
| Capital                expenditures                         |    | 17.4    |     |   | 3.8       |   |   | 21.2 |   |

----

| (in              millions)                                  |   | **PBM** | ** ** | ** ** | **SAAS** | ** ** | ** ** | **Total**  |   |
|-------------------------------------------------------------|--------|---------|------------|------------|----------|------------|------------|-----------------|--------|
| **For                the three months ended June 30, 2006** |   |    |       |       |     |       |       |            |   |
| Product                revenue:                             |   |    |       |       |     |       |       |            |   |
| Network                revenues                             | $      | 2,175.9 |       | $          | -        |       | $          | 2,175.9         |   |
| Home                delivery                revenues        |   | 1,311.3 |       |       | -        |       |       | 1,311.3         |   |
| Other                revenues                               |   | -       |       |       | 859.8    |       |       | 859.8           |   |
| Service                revenues                             |   | 41.2    |       |       | 32.9     |       |       | 74.1            |   |
| Total                revenues                               |   | 3,528.4 |       |       | 892.7    |       |       | 4,421.1         |   |
| Depreciation                and amortization expense        |   | 16.8    |       |       | 9.3      |       |       | 26.1            |   |
| Operating                income                             |   | 170.0   |       |       | 22.5     |       |       | 192.5           |   |
| Undistributed                loss from joint venture        |   |    |       |       |     |       |       | (0.3            | )      |
| Interest                income                              |   |    |       |       |     |       |       | 4.0             |   |
| Interest                expense                             |   |    |       |       |     |       |       | (23.7           | )      |
| Income                before income taxes                   |   |    |       |       |     |       |       | 172.5           |   |
| Capital                expenditures                         |   | 8.3     |       |       | 3.7      |       |       | 12.0            |   |
|                                                        |   |    |       |       |     |       |       |            |   |
| **For                the six months ended June 30, 2007**   |   |    |       |       |     |       |       |            |   |
| Product                revenue:                             |   |    |       |       |     |       |       |            |   |
| Network                revenues                             | $      | 4,708.9 |       | $          | -        |       | $          | 4,708.9         |   |
| Home                delivery                revenues        |   | 2,486.4 |       |       | -        |       |       | 2,486.4         |   |
| Other                revenues                               |   | -       |       |       | 1,799.5  |       |       | 1,799.5         |   |
| Service                revenues                             |   | 82.9    |       |       | 62.2     |       |       | 145.1           |   |
| Total                revenues                               |   | 7,278.2 |       |       | 1,861.7  |       |       | 9,139.9         |   |
| Depreciation                and amortization expense        |   | 33.3    |       |       | 18.8     |       |       | 52.1            |   |
| Operating                income                             |   | 486.8   |       |       | 26.9     |       |       | 513.7           |   |
| Non-operating                (charges) gains, net           |   |    |       |       |     |       |       | (18.8           | )      |
| Undistributed                loss from joint venture        |   |    |       |       |     |       |       | (0.8            | )      |
| Interest                income                              |   |    |       |       |     |       |       | 5.4             |   |
| Interest                expense                             |   |    |       |       |     |       |       | (47.8           | )      |
| Income                before income taxes                   |   |    |       |       |     |       |       | 451.7           |   |
| Capital                expenditures                         |   | 22.2    |       |       | 7.7      |       |       | 29.9            |   |
|                                                        |   |    |       |       |     |       |       |            |   |
| **For                the six months ended June 30, 2006**   |   |    |       |       |     |       |       |            |   |
| Product                revenue:                             |   |    |       |       |     |       |       |            |   |
| Network                revenues                             | $      | 4,325.0 |       | $          | -        |       | $          | 4,325.0         |   |
| Home                delivery                revenues        |   | 2,628.9 |       |       | -        |       |       | 2,628.9         |   |
| Other                revenues                               |   | -       |       |       | 1,696.5  |       |       | 1,696.5         |   |
| Service                revenues                             |   | 81.1    |       |       | 69.6     |       |       | 150.7           |   |
| Total                revenues                               |   | 7,035.0 |       |       | 1,766.1  |       |       | 8,801.1         |   |
| Depreciation                and amortization expense        |   | 33.4    |       |       | 18.5     |       |       | 51.9            |   |
| Operating                income                             |   | 328.2   |       |       | 47.8     |       |       | 376.0           |   |
| Undistributed                loss from joint venture        |   |    |       |       |     |       |       | (0.8            | )      |
| Interest                income                              |   |    |       |       |     |       |       | 9.0             |   |
| Interest                expense                             |   |    |       |       |     |       |       | (44.2           | )      |
| Income                before income taxes                   |   |    |       |       |     |       |       | 340.0           |   |
| Capital                expenditures                         |   | 14.7    |       |       | 6.0      |       |       | 20.7            |   |
|                                                        |   |    |       |       |     |       |       |            |   |
| **As                of June 30, 2007**                      |   |    |       |       |     |       |       |            |   |
| Total                assets                                 | $      | 2,587.3 |       | $          | 2,445.6  |       | $          | 5,032.9         |   |
| Investment                in equity method investees        |   | 0.3     |       |       | 3.3      |       |       | 3.6             |   |
|                                                        |   |    |       |       |     |       |       |            |   |
| **As                of December 31, 2006**                  |   |    |       |       |     |       |       |            |   |
| Total                assets                                 | $      | 2,681.5 |       | $          | 2,426.6  |       | $          | 5,108.1         |   |
| Investment                in equity method investees        |   | 0.2     |       |       | 2.7      |       |       | 2.9             |   |
|                                                        |   |    |       |       |     |       |       |            |   |

----

----

**Item      2.               Management’s      Discussion And Analysis Of Financial Condition And Results Of      Operations**

*Information      we have included or incorporated by reference in this Quarterly Report on Form      10-Q, and information which may be contained in our other filings with the      Securities and Exchange Commission (the “SEC”) and our press releases or other      public statements, contain or may contain forward-looking statements. These      forward-looking statements include, among others, statements of our plans,      objectives, expectations or intentions.*

*Our      forward-looking statements involve risks and uncertainties. Our actual results      may differ significantly from those projected or suggested in any      forward-looking statements. We do not undertake any obligation to release      publicly any revisions to such forward-looking statements to reflect events      or      circumstances occurring after the date hereof or to reflect the occurrence      of      unanticipated events. Factors which might cause such a difference to occur      include, but are not limited to:*

| *·  * | *uncertainties                associated with our acquisitions, which include integration risks                and                costs, uncertainties associated with client retention and repricing                of                client contracts, and uncertainties associated with the operations                of                acquired businesses* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *costs                and uncertainties of adverse results in litigation, including a number                of                pending class action cases that challenge certain of our business                practices* |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *investigations                of certain PBM practices and pharmaceutical pricing, marketing and                distribution practices currently being conducted by the U.S. Attorney                offices in Boston, and by other regulatory agencies including the                Department of Labor, and various state attorneys                general* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *changes                in industry pricing benchmarks such as average wholesale price (“AWP”) and                average manufacturer price (“AMP”), which could have the effect of                reducing prices and margins, including the impact of a proposed settlement                in a class action case involving First DataBank, an AWP reporting                service* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *uncertainties                regarding the implementation of the Medicare Part D prescription                drug                benefit, including the financial impact  to us to the extent                that we participate in the program on a risk-bearing basis, uncertainties                of client or member losses to other providers under Medicare Part                D, and                increased regulatory risk* |
|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *uncertainties                associated with U.S. Centers for Medicare & Medicaid’s (“CMS”)                implementation of the Medicare Part B Competitive Acquisition Program                (“CAP”), including the potential loss of clients/revenues to providers                choosing to participate in the                CAP* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *increased                compliance relating to our contracts with the DoD TRICARE Management                Activity and various state governments and                agencies* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *our                ability to maintain growth rates, or to control operating or capital                costs* |
|----------------------|----------------------------------------------------------------------------------------------------------------|

| *·  * | *continued                pressure on margins resulting from client demands for lower prices,                enhanced service offerings and/or higher service levels, and the                possible                termination of, or unfavorable modification to, contracts with key                clients                or providers* |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *competition                in the PBM and specialty pharmacy industries, and our ability to                consummate contract negotiations with prospective clients, as well                as                competition from new competitors offering services that may in whole                or in                part replace services that we now provide to our                customers* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *results                in regulatory matters, the adoption of new legislation or regulations                (including increased costs associated with compliance with new laws                and                regulations), more aggressive enforcement of existing legislation                or                regulations, or a change in the interpretation of existing legislation                or                regulations* |
|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *the                possible loss, or adverse modification of the terms, of relationships                with                pharmaceutical manufacturers, or changes in pricing, discount or                other                practices of pharmaceutical manufacturers or interruption of the                supply of                any pharmaceutical products* |
|----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *the                possible loss, or adverse modification of the terms, of contracts                with                pharmacies in our retail pharmacy                network* |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *the                use and protection of the intellectual property we use in our                business* |
|----------------------|------------------------------------------------------------------------------------------------------------|

| *·  * | *our                leverage and debt service obligations, including the effect of certain                covenants in our borrowing                agreements* |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *our                ability to continue to develop new products, services and delivery                channels* |
|----------------------|-----------------------------------------------------------------------------------------------------------------|

| *·  * | *general                developments in the health care industry, including the impact of                increases in health care costs, changes in drug utilization and cost                patterns and introductions of new                drugs* |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| *·  * | *increase                in credit risk relative to our clients due to adverse economic                trends* |
|----------------------|----------------------------------------------------------------------------------------------------------------|

| *·  * | *our                ability to attract and retain qualified                personnel* |
|----------------------|---------------------------------------------------------------------------------------|

| *·  * | *other                risks described from time to time in our filings with the                SEC* |
|----------------------|-----------------------------------------------------------------------------------------------------|

*We      do      not undertake any obligation to release publicly any revisions to such      forward-looking statements to reflect events or circumstances after the date      hereof or to reflect the occurrence of unanticipated events.*

*See      the more comprehensive description of risk factors under the captions “Forward      Looking Statements and Associated Risks” contained in Item 1 – “Business” of our      Annual Report on Form 10-K for the year ended December 31,      2006.*

**OVERVIEW**

**EXECUTIVE      SUMMARY AND TREND FACTORS AFFECTING THE BUSINESS**

----

**CRITICAL      ACCOUNTING POLICIES**

**RESULTS      OF OPERATIONS**

*PBM      OPERATING INCOME*

|                                               | **Three                Months Ended June 30,**  |    | **Six                Months Ended June 30,**  |
|----------------------------------------------------|------------------------------------------------------|---------|----------------------------------------------------|
| *(in              millions)*                       | ** 2007**                                  |    |                  **2006**                     | ** ** | ** 2007**** ** | ** ** | ** 2006**  |
| Product                revenues                    |                                                 |    |                                               |   |   |   |   |   |   |   |   |
| Network                revenues                    | $                                                    | 2,376.8 |                                               |   | $ | 2,175.9 |   |   | $ | 4,708.9 |   |   | $ | 4,325.0 |   |
| Home                delivery revenues              |                                                 | 1,250.5 |                                               |   |   | 1,311.3 |   |   |   | 2,486.4 |   |   |   | 2,628.9 |   |
| Service                revenues                    |                                                 | 42.0    |                                               |   |   | 41.2 |   |   |   | 82.9 |   |   |   | 81.1 |   |
| Total                PBM revenues                  |                                                 | 3,669.3 |                                               |   |   | 3,528.4 |   |   |   | 7,278.2 |   |   |   | 7,035.0 |   |
| Cost                of PBM revenues                |                                                 | 3,281.4 |                                               |   |   | 3,228.0 |   |   |   | 6,522.0 |   |   |   | 6,454.9 |   |
| PBM                gross                profit     |                                                 | 387.9   |                                               |   |   | 300.4 |   |   |   | 756.2 |   |   |   | 580.1 |   |
| PBM                SG&A expenses               |                                                 | 138.1   |                                               |   |   | 130.4 |   |   |   | 269.4 |   |   |   | 251.9 |   |
| PBM                operating                income | $                                                    | 249.8   |                                               |   | $ | 170.0 |   |   | $ | 486.8 |   |   | $ | 328.2 |   |
|                                               |                                                 |    |                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                adjusted PBM Claims(1)        |                                                 | 124.8   |                                               |   |   | 128.0 |   |   |   | 251.6 |   |   |   | 261.3 |   |

| (1)   | PBM                adjusted claims represent network claims plus home delivery claims,                which                are multiplied by 3, as home delivery claims are typically 90 day                claims                and network claims are typically 30 day                claims. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Product          Revenues for the three months ended June 30, 2007:*

----

*Product          Revenues for the six months ended June 30, 2007:  *

| *·  *  | We                experienced an increase of 4.5% in the cost of revenue per adjusted                claim                in the three months ended June 30, 2007 as compared to the same period                of                2006, primarily from ingredient cost inflation and a significant                reduction                of 100% co-payment claims as discussed                above. |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  *  | This                increase was partially offset by the 2.5% decrease in adjusted claims                volume, as well as better management of ingredient costs resulting                from                renegotiation of certain supplier contracts and the increase in the                aggregate generic fill rate, as discussed                above. |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  *  | We                experienced an increase of 5.4% in the cost of revenue per adjusted                claim                in the first six months of June 30, 2007 as compared to the same                period of                2006, primarily from ingredient cost inflation and a significant                reduction                of 100% co-payment claims as discussed                above. |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  *  | This                increase was partially offset by the 3.7% decrease in adjusted claims                volume, as well as better management of ingredient costs resulting                from                renegotiation of certain supplier contracts and the increase in the                aggregate generic fill rate, as discussed                above. |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| *·  * | Increased                spending of $23.7 million partially consisting of increased management                incentive compensation in addition to the effect of                inflation. |
|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | This                increase was offset by an $11.1 million decrease in professional                fees,                primarily due to a reduction of IT contractors and                consultants. |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*SAAS      OPERATING INCOME*

|                                                |                                                 |   |                                               |
|-----------------------------------------------------|------------------------------------------------------|--------|----------------------------------------------------|
|                                                | **Three                Months Ended June 30,**  |   | **Six                Months Ended June 30,**  |
| *(in                millions)*                      | **2007**                                        |   | **2006**                                      |   | **2007**  |   | **2006**  |
| Product                revenues                     | $                                                    | 898.4  |                                               |   | $ | 859.8 |   |   | $ | 1,799.5 |   |   | $ | 1,696.5 |   |
| Service                revenues                     |                                                 | 32.7   |                                               |   |   | 32.9 |   |   |   | 62.2 |   |   |   | 69.6 |   |
| Total                SAAS                revenues   |                                                 | 931.1  |                                               |   |   | 892.7 |   |   |   | 1,861.7 |   |   |   | 1,766.1 |   |
| Cost                of SAAS revenues                |                                                 | 875.6  |                                               |   |   | 829.5 |   |   |   | 1,748.4 |   |   |   | 1,638.0 |   |
| SAAS                gross                profit     |                                                 | 55.5   |                                               |   |   | 63.2 |   |   |   | 113.3 |   |   |   | 128.1 |   |
| SAAS                SG&A expenses               |                                                 | 45.0   |                                               |   |   | 40.7 |   |   |   | 86.4 |   |   |   | 80.3 |   |
| SAAS                operating                income | $                                                    | 10.5   |                                               |   | $ | 22.5 |   |   | $ | 26.9 |   |   | $ | 47.8 |   |

----

*OTHER      (EXPENSE) INCOME*

*PROVISION      FOR INCOME TAXES*

----

*NET        INCOME AND EARNINGS PER SHARE*

**LIQUIDITY        AND CAPITAL RESOURCES**

*OPERATING        CASH FLOW AND CAPITAL EXPENDITURES*

| *·  * | Net                income increased $73.9 million in the six months ended June 30, 2007                as                compared to the same period of 2006. |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | Smaller                  payouts of management incentive bonuses in the first six months                  of 2007 as                  compared to the same period of                  2006. |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *· *  | In                    the first half of 2006, inventory balances declined by approximately                    $12.6                    million as a result of site consolidations.  In contrast,                    inventory balances in the first half of 2007 have increased by                    approximately $3.8 million as a result of timing of inventory                    purchases. |
|----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *· *  | In                    the first half of 2007, the changes in the most significant components                    of                    working capital, accounts receivable and claims and rebates payable,                    resulted in a use of cash as the decline in accounts receiveable                    was more                    than offset by the corresponding decline in payables.  These changes                    were primarily a result of lower claim volume in the first half                    of 2007                    versus prior periods. |
|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*STOCK        REPURCHASE PROGRAM (reflecting the two-for-one stock split effective June        22,        2007**)***

----

*CHANGES      IN BUSINESS*

*BANK      CREDIT FACILITY*

| *· *  | Delayed                  draw feature (through December 31, 2007) allowing for interim borrowings                  up to $800.0 million. |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| *· *  | No                  scheduled payments, until the maturity of the                  loan. |
|----------------------|------------------------------------------------------------------------------------------|

----

*CONTRACTUAL      OBLIGATIONS*

|   |                                                       |                                                           |
|--------|------------------------------------------------------------|----------------------------------------------------------------|
|   |                                                       | **Payments                Due by Period as of June 30,**  |
|   | **Contractual                obligations**                 | **Total**                                                 |   | **2007**  |   | **2008                - 2009** |   | ** 2010                - 2011** |   | **After                2011**  |
|   |                                                       |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Long-term                debt                              | $                                                              | 1,920.4 |   |   | $ | 100.0 |   |   | $ | 680.1 |   |   | $ | 1,140.1 |   |   | $ | 0.2 |   |
|   | Future                minimum leasepayments  (1) |                                                           | 180.0 |   |   |   | 13.6 |   |   |   | 52.9 |   |   |   | 40.8 |   |   |   | 72.7 |   |
|   |                                                       |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Total                contractual cashobligations           | $                                                              | 2,100.4 |   |   | $ | 113.6 |   |   | $ | 733.0 |   |   | $ | 1,180.9 |   |   | $ | 72.9 |   |

**OTHER      MATTERS**

**IMPACT      OF INFLATION**

----

**Item      3.                   Quantitative      and Qualitative Disclosures About Market Risk**

**Item      4.           Controls and      Procedures**

----

|                                                  |
|-------------------------------------------------------|
|  PART                II.  OTHER INFORMATION |

**Item      1.               Legal Proceedings**

| *·  *  |  Anthony                Bradley, et al v. First Health Services Corporation, et al (Case                No.BC319292, Superior Court for the State of California, County of                Los                Angeles).  Our motion to dismiss the complaint was granted and                the dismissal was affirmed on appeal.  Petition for review with                the California Supreme Court was denied.  We consider this case                closed. |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  *  | Pearson’s                Pharmacy, Inc. and Cam Enterprises, Inc. d/b/a Altadena Pharmacy                v.                Express Scripts, Inc. (Case No. 3:06-CV-00073-WKW, United States                District Court for the Middle District of Alabama) (filed January                26,                2006).  On February 15, 2006, an amended complaint was filed                alleging a class action on behalf of all pharmacies reimbursed based                upon                Average Wholesale Price.  On June 7, 2007, the court dismissed                the claims for fraudulent misrepresentation, fraudulent suppression                and                unjust enrichment, leaving only a breach of contract                claim. |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Item                2.** | **Unregistered                Sales of Equity Securities and Use of                Proceeds** |
|----------------------------|-----------------------------------------------------------------------------------------------|

| Period                                    | Shares                purchased |  Average                price                paid per                share  | Shares                purchased as                part of a publicly                announced                program | Maximum                shares that                may yet  be purchased                under the                program |
|-------------------------------------------|---------------------------------|---------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|
|                                      |                            |                                                                                  |                                                                                                                 |                                                                                                                         |   |
| 4/1/2007                – 4/30/2007 | 2.1                             |                                                                                  | $                                                                                                                    | 47.94                                                                                                                        |   | 2.1 |   | 26.2 |   |
| 5/1/2007                – 5/31/2007 | 14.2                            |                                                                                  |                                                                                                                 | 48.63                                                                                                                        |   | 14.2 |   | 12.0 |   |
| 6/1/2007                – 6/30/2007 | 0.7                             |                                                                                  |                                                                                                                 | 50.70                                                                                                                        |   | 0.7 |   | 11.3 |   |
| 2007                Total                 | 17.0                            |                                                                                  | $                                                                                                                    | 48.63                                                                                                                        |   | 17.0 |   |   |   |

| **Item                4.** | **Submission                of Matters to a Vote of Security                Holders** |
|----------------------------|---------------------------------------------------------------------------------------|

|   |                                   | VotesCast                  for  | VotesWithheld  |
|--------|----------------------------------------|--------------------------------------|---------------------|
|   | Gary                  G. Benanav       | 106,109,791                          | 3,620,092           |
|   | Frank                  J. Borelli      | 105,987,326                          | 3,742,557           |
|   | Maura                  C. Breen        | 106,121,125                          | 3,608,758           |
|   | Nicholas                  J. LaHowchic | 106,131,294                          | 3,598,589           |
|   | Thomas                  P. Mac Mahon   | 106,127,836                          | 3,602,047           |
|   | Woodrow                  A. Myers, Jr. | 106,116,879                          | 3,613,004           |
|   | John                  O. Parker, Jr.   | 106,129,834                          | 3,600,049           |
|   | George                  Paz            | 102,212,101                          | 7,517,782           |
|   | Samuel                  K. Skinner     | 105,295,509                          | 4,434,374           |
|   | Seymour                  Sternberg     | 101,767,148                          | 7,962,735           |
|   | Barrett                  A. Toan       | 106,112,159                          | 3,617,724           |
|   | Howard                  L. Waltman     | 102,259,978                          | 7,469,905           |

----

| **Item                5.** | **Other                Information** |
|----------------------------|--------------------------------------|

| **Item                6.** | **Exhibits** |
|----------------------------|--------------|

| (a)   | See                Index to Exhibits below. |
|-----------------|---------------------------------------------|

----

**SIGNATURES**

|                                                       | EXPRESS              SCRIPTS, INC. |                                                                                                                                                                                                                                                                                                           |
|------------------------------------------------------------|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                       | (Registrant)                       |                                                                                                                                                                                                                                                                                                           |
|                                                       |                               |                                                                                                                                                                                                                                                                                                           |   |
|                                                       |                               |                                                                                                                                                                                                                                                                                                           |   |
| Date:                    July 25, 2007 | By:                                | /s/ George              Paz                                              |   |
|                                                       |                               | George              Paz                                                                                                                                                                                                                                                                                        |   |
|                                                       |                               | President, Chief                Executive Officer and Chairman                                                                                                                                                                                                                                                 |   |

| Date:                    July 25, 2007 | By:    | /s/ Edward              Stiften                                 |   |
|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | Edward              Stiften                                                                                                                                                                                                          |   |
|                                                       |   | Senior Vice President                and Chief Financial                Officer                                                                                                                                                      |   |

----

| ExhibitNumber |  Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.11          | Agreement                and Plan of Merger, dated July 21, 2005, by and among the Company,                Pony                Acquisition Corporation, and Priority Healthcare Corporation, incorporated                by reference to Exhibit No. 2.1 to the Company’s Current Report on Form                8-K filed July 22, 2005.                                                                                                                                                                                                                                                                                                                                          |
| 3.1           | Amended                and Restated Certificate of Incorporation of the Company, incorporated                by                reference to the Company’s Annual Report on Form 10-K for the year ending                December 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.2           | Certificate                of Amendment to the Certificate of Incorporation of the Company dated                June                2, 2004, incorporated by reference to Exhibit No. 3.2 to the Company’s                Quarterly Report on Form 10-Q for the quarter ending June 30,                2004.                                                                                                                                                                                                                                                                                                                                                                      |
| 3.3           | Certificate                of Amendment to the Certificate of Incorporation of the Company dated                May                24, 2006, incorporated by reference to Exhibit No. 3.3 to the Company’s                Quarterly Report on Form 10-Q for the quarter ending June 30,                2006.                                                                                                                                                                                                                                                                                                                                                                      |
| 3.4           | Third                Amended and Restated Bylaws, incorporated by reference to Exhibit                No. 3.3                to the Company’s Quarterly Report on Form 10-Q for the quarter ending June                30, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1           | Form                of Certificate for Common Stock, incorporated by reference to Exhibit                No.                4.1 to the Company’s Registration Statement on Form S-1 filed June 9, 1992                (No. 33-46974) (the “Registration Statement”).                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.2           | Stockholder                and Registration Rights Agreement dated as of October 6, 2000 between                the                Company and New York Life Insurance Company, incorporated by reference                to                Exhibit No. 4.2 to the Company's Amendment No. 1 to Registration                Statement                on Form S-3 filed October 17, 2000 (Registration Number                333-47572).                                                                                                                                                                                                                                                  |
| 4.3           | Asset                Acquisition Agreement dated October 17, 2000, between NYLIFE Healthcare                Management, Inc., the Company, NYLIFE LLC and New York Life Insurance                Company, incorporated by reference to Exhibit No. 4.3 to the Company's                amendment No. 1 to the Registration Statement on Form S-3 filed October                17, 2000 (Registration Number 333-47572).                                                                                                                                                                                                                                                                 |
| 4.4           | Rights                Agreement, dated as of July 25, 2001, between the Corporation and                American                Stock Transfer & Trust Company, as Rights Agent, which includes the                Certificate of Designations for the Series A Junior Participating                Preferred Stock as Exhibit A, the Form of Right Certificate as Exhibit                B                and the Summary of Rights to Purchase Preferred Shares as Exhibit                C,                incorporated by reference to Exhibit No. 4.1 to the Company's Current                Report on Form 8-K filed July 31, 2001.                                           |
| 4.5           | Amendment                dated April 25, 2003 to the Stockholder and Registration Rights Agreement                dated as of October 6, 2000 between the Company and New York Life                Insurance Company, incorporated by reference to Exhibit No. 4.8 to                the                Company’s Quarterly Report on Form 10-Q for the period ending March 31,                2003.                                                                                                                                                                                                                                                                              |
| 4.6           | Amendment                No. 1 to the Rights Agreement between the Corporation and American                Stock                Transfer & Trust Company, as Rights Agent, dated May 25, 2005,                incorporated by reference to Exhibit No. 10.1 to the Company’s Current                Report on Form 8-K filed May 31, 2005.                                                                                                                                                                                                                                                                                                                                    |
| 10.1          | Credit                Agreement, dated as of October 14, 2005, among Express Scripts, Inc.,                Credit Suisse, as administrative agent, Citigroup Global Markets                Inc., as                syndication agent, Bank of Nova Scotia, Calyon New York Branch, Deutsche                Bank Securities Inc., JPMorgan Chase Bank, N.A., The Royal Bank of                Scotland plc, Sun Trust and Union Bank of California, as co-documentation                agents and the lenders named therein, incorporated by reference to                Exhibit                10.1 to the Company's Current Report on Form 8-K filed October 14,                2005.  |

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| ExhibitNumber        |                Exhibit                                                                                                                                                                                                                                                                                                                                                                                      |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.                2 | Amendment                No. 1 and Consent No. 1 to Credit Agreement, dated as of May 7, 2007,                among Express Scripts, Inc., Credit Suisse, as administrative agent,                and                the lenders named therein, incorporated by reference to Exhibit No.                10.1                to the Company's Current Report on Form 8-K filed May 11,                2007.  |
| 10.33                | Express                Scripts, Inc. Amended and Restated Executive Deferred Compensation                Plan                (effective December 31, 2004 and grandfathered for the purposes of                Section                409A of the Code), incorporated by reference to Exhibit No. 10.1                to the                Company's Current Report on Form 8-K filed May 25, 2007.        |
| 10.43                | Express                Scripts, Inc. Executive Deferred Compensation Plan of 2005, incorporated                by reference to Exhibit No. 10.2 to the Company's Current Report                on Form                8-K filed May 25, 2007.                                                                                                                                                               |
| 10.53                | Summary                of Special Equity Awards and Salary and Bonus Adjustments for Named                Executive Officers, incorporated by reference to Exhibit No. 10.3                to the                Company's Current Report on Form 8-K filed May 25, 2007.                                                                                                                                   |
| 31.12                | Certification                by George Paz, as Chairman, President and Chief Executive Officer                of                Express Scripts, Inc., pursuant to Exchange Act Rule                13a-14(a).                                                                                                                                                                                              |
| 31.22                | Certification                by Edward Stiften, as Senior Vice President and Chief Financial Officer                of                Express Scripts, Inc., pursuant to Exchange Act Rule                13a-14(a).                                                                                                                                                                                        |
| 32.12                | Certification                by George Paz, as Chairman, President and Chief Executive Officer                of                Express Scripts, Inc., pursuant to 18 U.S.C. § 1350 and Exchange Act Rule                13a-14(b).                                                                                                                                                                    |
| 32.22                | Certification                by Edward Stiften, as Senior Vice President and Chief Financial Officer                of                Express Scripts, Inc., pursuant to 18 U.S.C. § 1350 and Exchange Act Rule                13a-14(b).                                                                                                                                                              |

|   |   |
|--------|--------|

| 1   | The                Company agrees to furnish supplementally a copy of any omitted schedule                to                this agreement to the Commission upon                request. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2   | Filed                herein. |
|---------------|------------------------------|

| 3   | Management                contract or compensatory plan or                arrangement. |
|---------------|----------------------------------------------------------------------------------------|

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