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Express Scripts Holding Company Message Board

  • stephanie_112358 stephanie_112358 Oct 4, 2011 2:25 PM Flag

    How long til WAG SP surpasses ESRX?

    I posed this question a few days ago and predicted that it will happen before the end of the year, and I believe even more now that that will prove correct. Both stocks are obviously taking a haircut in this macroenvironment--low tide brings all ships down, etc.--but ESRX is in an ugly, nay, VERY UGLY, position.

    As I've alluded to before, there are legions of loyal Walgreens customers who have Medicare Part D or Medicare Advantage Plans that use Express Scripts. These people are not tied to their plans the way a company employee, say, is to the one (or two if they are lucky) choices their employer offers. Rather, Medicare have open enrollment every year between Oct. 15th & Dec. 7th. That is to say, starting Oct. 15th Medicare enrollees can start to drop Express Scripts.

    Why is this important? Well, WAG has tens of thousands of appointments already set up starting Oct. 15th with their medicare patients. At these appointments, WAG customers will be given a printout from the medicare.gov website listing all the available plans and comparative costs (utilizing their prescription information from this year as a guide). I suspect WAG will probably take this opportunity to POINT OUT WHICH PLANS WILL BE PARTICIPATING in their network. Not so good for ESRX.

    Which is to say, in short, that unless some magic happens and ESRX gets wise about signing a contract with WAG, their medicare enrollment numbers are going to start dropping, dropping A LOT, and FAST.

    That is without even mentioning the number of companies who are in the process of finding a new insurance carrier (or many who ALREADY HAVE) just because it appears possible that ESRX will not be able to provide full market access.

    All told, it would appear that WAG is going to come out of this war in a much better position than ESRX. WAG stock price will probably drop to #30/share, maybe even dip into the $20's, but ESRX is going to DROP LIKE A LED ZEPPELIN. One can't even predict how low it might go.

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    • Unfortunately what you are saying is not true.

      The stock price of any company is irrelevant when compared to market cap. ESRX and WAG are relatively inexpensive when compared to forward earnings. I bought shares of ESRX yesterday as I consider this a good entry point. The issue with WAG/ESRX will hurt both companies, however WAG will lose short term because in January customers will fill at a different pharmacy.

      ESRX may lose long term if clients wish to be part of Caremark....however WAG will still lose because Caremark will steer customers to CVS.

      Despite what analysts say, WAG may be harmed more, however not as much as WAG employees.

      Good Luck if ure a WAG employee. If you are, consider opening your own shop!

      • 2 Replies to cmxgen
      • $0.44 closer today. The per share price gap is narrowing almost daily. ESRX is looking terrible for so many reasons. Can't wait to see what the Feds find out when ESRX has to disclose it's Medicare Prescription Markups.

        See: http://www.bloomberg.com/news/2011-10-03/express-scripts-must-disclose-markup-in-drug-plans-u-s-says.html?cmpid=yhoo

        Particulary interesting was the following:

        "The pharmacy-benefit managers also would have to disclose the amount and types of rebates and discounts from drugmakers and the percentage of generic drugs dispensed."

        This is interesting because one of the conditions ESRX's proposed contract would have imposed on WAG was the right to determine, at their sole discretion, and in their own time-frame, what is and what is not a "brand name" medication, as if that isn't so obvious as to be patently absurd. In light of what I quoted above, you should ask yourselves why they would want to have the ability to unilaterally decide what is "brand" and what is "generic." I guess they will argue that their price fixing/rebate negotiating is a "proprietary" issue and shouldn't be disclosed to the public, even though it's in the public's interest that they are making these deals---ummmm, yeah, either that or they are running a nearly criminal enterprise.

        Interesting to see what comes of it, indeed.

      • cmxgen,

        I noted with humor that the Walgreens child-pharmacist cabal is over here, as well, one-starring your post (which I corrected) and five-starring stephanie's pro-Walgreens "devotion". Note that no other posts on this message board have ANY stars.

        How pathetic and desperate these Waggies have become!

        Yank

 
ESRX
72.29-0.89(-1.22%)Apr 17 4:00 PMEDT

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