who the f are you, his big sister? Whats not to understand about losing 2 billion in contracts and being a drag on earnings as well as being under investigation by the ftc as well as being rejected by several trade groups. Your posts are nothing but air.
a new revenue stream? Its losing revenue and eps. How can caremark be a drain as you say on cvs earnings if its a revenue and profit are growing. Bottom and top line is that it is not working, losing business, getting resistance from many angles and pressure from the ftc. PBM's need retailers and many retailers do not want to do business with their competition
First, you still are scared to say if you are long/short/ or board.
The pbm landscape is littered with failures such as lilly, SmithKline, Riteaid, MHS and MRK.CVS announced another $2 billion in lost business at its Caremark PBM unit — which means the company won’t hit it’s 2010 profit targets. In fact, the company expects operating profits at the PBM unit to fall 10% to 12% in 2010. Contract losses included Chrysler, Coventry and Horizon Blue Cross Blue Shield of New Jersey (Clarification, Nov. 11, 2009: CVS Caremark lost the contract to serve the New Jersey state health benefit plan PBM business through Horizon, but maintains Horizon’s commercial PBM business). The company also took a big hit from losses in Medicare Part D membership. CVS chairman Tom Ryan continued to defend the combined retail-PBM model during a conference call with Wall Street analysts, noting “if you look at these contracts that we lost, none of them was because of the model.” Instead, he blamed the losses on varying reasons, including price, service and the company’s marketing message. PRICE & SERVICE! The model is working great wouldn'y you agree. Then wag brought them to their knees. This great model is getting hit from all angles and will be sold in 12 months with mega writeoffs.
And this matters because??? Are you trying to imply that WAG lost the Trustmark PBM business to CVS or that WAG was somehow attempting to obtain their PBM business? Yes, WAG has a small PBM but that is not the type of client they focus on and they likely didn't even participate in the RFP process. Last I heard WAG was in the CVS network so the PBM being serviced by them should not negatively impact WAG.
Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs, They maintain the formulary, contracting with pharmacies, and negotiating discounts and rebates with drug manufacturers. Today, more than 210 million Americans nationwide receive drug benefits administered by PBMs. Fortune 500 employers, and public purchasers (Medicare Part D, the Federal Employees Health Benefits Program) — Today, more than 210 million Americans nationwide receive drug benefits administered by PBMs.
PBMs aggregate the buying clout of millions of enrollees through their client health plans, enabling plan sponsors and individuals to obtain lower prices for their prescription drugs through price discounts from retail pharmacies, rebates from pharmaceutical manufacturers, and the efficiencies of mail-service pharmacies. PBMs also use clinical tools aimed at reducing inappropriate prescribing by physicians, reducing medication errors, and improving consumer compliance and health outcomes.
I posted the above information so you will have a more informed understanding of a PBM.
I will break this down for you. so you can answer these questions and grow your investment and plan you strategy.
1) Does walgreens have a formulary for off patented Drugs.
2) Negotiating discounts and rebates with drug manufacturers.
3) Is walgreens a Wholesaler buyer of drugs.
3) Do they supply drugs to Employer sponsored medical plans, and part D Medicare plans also state Medicaid plans.
4) Do they offer discounts on medications to non-insured people...with a club type membership.
5) Mail-order pharmacy do they have one.
6) Does Walgreen have Rx tools that reduce medication errors.
7) The last piece about compliance and outcomes separates the winners from the losers.
The problem Walgreens is facing now and into the future is that PBM contracts allow a Pharmacy Benefit Manager to be involved in patient care and selection of pharmacies. Where as a retail drug supplier needs a contract with the PBM and can only supply's what has been ordered.
Think of it as designing a building, or being the supply yard for materials.
The former controls what the supply yard orders in materials.
Now if you want to stay in business you better have a good working relationship with the company that orders the materials.
If Walgreens did not go after the Trustmark business, walgreens needs a new Executive Staff with experience in this process or better yet become a franchise business and sell off its Drug stores as some in the lower levels of Wall-street have envisioned.
I've seen a suggested buyout price tag on the Walgreens company and sometimes the pieces are worth more than the whole.
A real upside there!
There still are corporate raiders.. watch the movie Wallstreet.
As for the RFP process, Walgreens did not win the RFP.
Caremark/CVS was the Winner, and to the winner goes the rewards.
"That is not the type of client they focus on".
" WAG was in the CVS network so the PBM being serviced by them should not negatively impact WAG".
Travels: you really need to keep up with the news and read the Statements of Walgreens Executive staff and listen to the conference calls.
1 + million Insured lives and you suggest that Walgreens is not interested in providing services to them.
The Pharmacy America Trusted now is looking for a way to stay competitive in the changing landscape of going from a wagon to a automobile.
As you pointed out Walgreens in now part of the CVS/Carkmark network.
"Strategic planning is Worthless without a Strategic Vision"
Re: Wasson was RIGHT in cutting CVS loose!!!
And this poster calls me a dope.>>
Congratulations, Tiaguy you own words revel your lack in understanding the direction of this sector.
I think going around insurance payers, directly to the employer does not always work out, Does IT !!