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, under pressure to take action as its drug portfolio ages, plans to sell part of its Merck-Medco pharmacy-benefits management business in a public offering later this year.

The country's No. 2 drug company eventually plans to establish the unit, which it acquired for $6 billion in 1993, as a separately traded public company, although all the details haven't been worked out.

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Merck also said it expects its core pharmaceuticals business to post double-digit per-share earnings growth in 2003.

A spinoff of Merck-Medco is seen as giving the company a horde of cash to carry out acquisitions, or alternatively as giving it the autonomy and earnings clarity to avoid having to do a blockbuster merger. Company executives say separation of the pharmacy-benefits unit from the drugs unit will allow more accurate and higher valuation of the separate businesses -- the usual rationale for a spinoff.

On Dec. 11, the company shocked Wall Street by predicting flat 2002 earnings, as patents and key drugs expire and sales growth slows for its two top-selling medicines, Vioxx for arthritis and Zocor for high cholesterol. Prior to the announcement, analysts had been expecting growth of up to 8.3%.