In an interview this week, Teva Pharmaceuticals' (NASDAQ:TEVA) North American CEO, William Marth, pointed out that when economic times are good, the generic-drug business is good, and when times are bad, the business is better.

Apparently the same goes for the middleman. In its fourth quarter, Medco Health Solutions (NYSE:MHS) posted a 37% increase in EPS, excluding the amortization of intangible assets still on the books from its 2003 spin-off from Merck (NYSE:MRK).

Nearly 65% of the prescriptions Medco filled were for generic drugs -- up 350 basis points from the year-ago quarter. Generic drug use, combined with a 9.4% increase in the use of its mail-order system, helped increase the company's bottom line. Customers trying to save money actually help pharmacy benefit managers like Medco, Express Scripts (NASDAQ:ESRX), and CVS Caremark (NYSE:CVS).

What surprises me is that $4 generics offered by Target (NYSE:TGT), Wal-Mart Stores (NYSE:WMT), and others haven't hurt the pharmacy benefit manager's mail-order business. Clearly there's plenty of penny-pinching customers to go around.

And they're not likely to go back to their wastrel ways anytime soon. The Stock Advisor recommendation is guiding for a 15%-20% increase in EPS this year, excluding the aforementioned intangible assets. Sure, that's not quite as much growth as it saw from 2007 to 2008, but who's really going to complain in this market?

More important, Medco is growing cash. The company expects to bring in over $2 billion in operating cash flow this year, compared to $1.6 billion last year. Cash is king and should give Medco a lot of flexibility this year to continue share repurchases, further boosting EPS. If Marth's comments hold true, this company could make a very interesting investment from current prices.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Wal-Mart is an Inside Value recommendation. Need some free entertainment? Go read the Fool's disclosure policy.