Shareholders of pharmacy benefit manager Medco Health Solutions have given the OK to merge with rival company Express Scripts.

Based on a preliminary vote count, 99 percent of shareholders of the Franklin, N.J.-based company approved the merger. In addition, a non-binding vote approved by shareholders also approved certain merger-related arrangements for Medco's executive officers by a vote of 95 percent to 5 percent.  

The merger must also receive approval from Express Scripts shareholders and the federal government. The merging parties expect to close the deal in the first half of 2012.

St.Louis-based Express Scripts in July announced their intention to purchase Medco for $29.1 billion, or $71.36 per share. Yet Medco is actually the bigger company as it reported 2010 revenue of $59.8 billion, while St.Louis-based Express Scripts reported revenue of $24.7 billion.

Although the companies tout the deal as a plan to reduce the cost of prescription drugs, the deal has attracted antitrust concerns.

The proposed mega-merger of pharmacy benefit managers (PBMs) Express Scripts, Inc. and Medco Health Solutions would harm patients by reducing choice, decreasing access to pharmacy services and ultimately leading to higher prescription drug costs paid by plan sponsors and consumers, said a statement from the National Community Pharmacists Association.

But Express Scripts CEO George Paz said in recent testimony to the U.S. Senate that the merger would be acceptable because drug prices are expected to drop because of heightened competition in the pharmaceutical industry from both brand-name and generic drugs.

The U.S. Department of Justice has become more stringent in taking on mergers it feels would stunt competition. Justice Department opposition led AT&T to drop its $39 billion bid to buy T-Mobile USA on Monday. The planned merger between NYSE Euronext and Nasdaq OMX, along with H&R Block's bid to purchase low-cost rival TaxACT were also called off in 2011 due to heightened scrutiny by regulators.

Shares of Medco are down 0.26 percent to $55.41 in late-morning trading. Shares of Express Scripts are down 0.61 percent to $44.27.