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Walgreen Co. Message Board

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  • robbsbeach robbsbeach Jul 25, 2010 9:51 AM Flag

    AARP drops the mailbomb!

    Thanks for the information about United Healthcare teaming up with AARP to reduce the cost of Mail order prescriptions by offering $4.00 Generic medication and reducing the cost of Branded drugs by $15.00.
    It appears that Walgreens may lose more patient files for maintenance medications than they purchased.

    Believe it, the SEC is tasked with monitoring these boards,
    I know that some stock brokers.. have been arrested and convicted for using investment message boards to pump stocks up or down.
    What is also interesting is that the major investment newspapers have not followed up on this event that will impact brick and mortar drug stores.

    Yahoo deleted the last post and discussion but the information is now out and they cant delete that, reminds me of what I learned about WW2 when the Germans burnt books that they didn't like, it appears there are posters on this message board who want less information out in the public domain so they can pump up a single point of view.

    Back to to point of analyzing this investment, the Capital investment of Walgreens most recent purchase D/R will dilute earning.
    And the Mini Mart direction with Beer and Wine sales generating the needed revenue from the off-setting declines in Rx revenues is very short sighted one,
    That will show long term.
    This current management Team has made financial decisions that have not grown Walgreens in the core issues going forward facing Retail Pharmacies. It has not shown any utilization management programs of long term value to control Drug spend to payor's and the results of this are coming in.
    As for company's that finance purchases with capital or debt that is a complex decision that looks at long term opportunities and gets the buy-in credit from the investment community.
    I hope that those Beer and Wine drinker are buying a lot of other supermarket products so revenue off-set are diminished.
    The more I read about this guy Corky the more I like him, to bad he is not guiding this company.

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    • This whole issue is a canard from the get-go. Mail order only does roughly 20% of the total rx volume. The primary driving force behind the use of mail order is that for the private sector it is REQUIRED by many plans for maintenance medications. An added carrot of saving a copay (pay 2 monthly copays to get 3 months of medication) is also widely used and still the percentage of total rxs filled at mail-order is roughly 20%. If the REQUIREMENT to use mail order for maintenance meds were removed you would see volume at mail order plummet. How does this relate to Medicare?.....Per CMS requirements, Medicare plans are specifically forbidden from requiring a member to use mail order…..in fact Medicare members are free to choose whatever mail order vendor they want regardless of what or who they buy their plan from. For example, a member can buy their PDP plan from Aetna but use Express Scripts as their mail order vendor instead of Aetna’s own mail order….or a person can buy their PDP plan from AARP but choose to use CVS Caremark as their mail order provider instead of Medco or Rx Solutions. Or, as is the case with 80% of rxs, the member can choose to get their medications at retail. There is no requirement to use mail-order so the likelihood that this move will have any effect on WAG, CVS or any other retail establishment is remote at best.

      The poorest decision you could possibly make in choosing a PDP plan would be to base it on a $4 generic copay. Most of members out of pocket expenditures will surround brand medications which comprised 40% of all rxs written in 2009. Selecting a plan with a $4 generic copay and all of your brand meds in nonpreferred tiers would be a poor decision. A better choice would be to find the carrier with your brand meds in the preferred tier and let the generic tier 1 meds fall where they will. Generic copays among plans are already very competitive. For the actual plans offered by AARP you are looking at either a $2 savings or a $3 savings per generic rx filled versus what the copays were before. The difference between a Tier 3 preferred brand and a tier 4 or 5 brand even with a $15 give away is still quite high…..higher than any savings you could get through a $4 generic program.

    • <<” Thanks for the information about United Healthcare teaming up with AARP to reduce the cost of Mail order prescriptions by offering $4.00 Generic medication and reducing the cost of Branded drugs by $15.00.”>>


      Again you conveniently left out the $4.00 Generics are available on only “some plans,” apparently don’t understand Medicare demographics, and completely don’t understand exactly who the clientele is that AARP is targeting which isn’t WAG, CVS, or any other retail company. AARP’s move is strictly to try and lure Medicare-C (Medicare Advantage) customers over to PDP Medicare-D plans which are the bulk of the offerings which AARP has. Insurance companies, including United Healthcare the insurance company behind this initiative, prefer to push Medicare-C (Medicare Advantage) as opposed to standalone PDP Medicare-D plans. In many cases premiums for Medicare-C are less than the premiums for Medicare part B + Medicare-D (PDP) + Medicare Supplement. In addition many Medicare-C plans cover medications which are excluded under Medicare-D and would therefore be excluded under all of the PDP plans offered by AARP or anyone else and not subject to the $4.00 copay or the $15 reduction in copay for any of the med which are brand. They are not covered so they are not filled or are filled for a cash price if the mail order offers that. Medicare-D excludes from coverage all erectile dysfunction meds, all cosmetic meds, all OTC meds, all benzodiazepines (valium, ativan, restoril, klonopin, many more and their generics), all antitussives (cough medications) when used to treat an acute URI), all vitamins (vitamin B12 inj, folic acid, vitamin D, Deplin, Mentax, Rx iron vitamins many others) except prenatal vitamins (subject to age restrictions and confirmation of DX), all medications used to lose weight, all barbiturates, all DESI 4 and 5 medications (hyoscyamine and all products that contain it, librax, premarin with testosterone, estrogen with testosterone, hundreds of others), and all drugs which do not have FDA approval under a current ANDA or NDA (generic nitroglycerin sublingual, nitroglycerin Caps, most morphine concentrate makers, oxycodone caps, oxycodone concentrate, hundreds of others). Many Medicare-C plans cover some of these medications, in particular the benzodiazepines and barbiturates giving them a distinct advantage over the PDP plans which AARP has. In fact it is a metric that PDP plans cannot even compete with. Unable to compete on medical benefits ( stand alone AARP PDP plans have none), and unable to compete at all with the expanded drug coverage that Medicare-C plans offer, AARP is left with little else to do but cut their own bottom line in an attempt to lure members away from Medicare-C. Insurance Companies, including United Healthcare have responded by making their formularies much more restrictive for standalone PDP plans when compared to Medicare-C plans. By doing this they keep their Medicare-C plans more advantageous relative to PDP plans without attacking their own bottom line as AARP has done.

    • Man I missed it.

      • 1 Reply to cmxgen
      • I read your post before it was deleted and it was informative to many investors that don't understand how competitive this sector is when it comes to contracting with the Payer and dint understand the long term effects of not getting a contract.

        Tia.Guy222 and you are asking the same question so I didn't understand what all the Lolol was about.
        The allocation of resources in projects between competing opportunities and there value going forward is what some of us are asking about and discussing.

        What your take on the Clinic concept of Walgreens Vs CVS and now Target going into the season of vaccination shots ?

 
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