Walgeens Spokes person about ESRX impass. "And we have a philosophical difference in that if you’re trying to reimburse us at a rate that is below our cost to fill, or below the national cost to fill, how do you expect us to remain in business"?
'It’s fair to say we’re still at this impass".
big.yank has focused on SG&A costs of Walgreens, and a examination of this issue might assist us in understanding what he is talking about when a PBM's feels Walgreens costs are excessive in providing a pharmacy service. I do not recall ESRX ever saying that other community pharmacy costs were Excessive. Some corporations have a Corporate leased Air force, others have fleets of executive auto's and limo services with a staff of employees that do little but insulate the C-Suite. Many Corporations have been known to spend lavishly on there executives, Club memberships, Charity parties, Hollywood style Entertainment and Business meals.
Or is it just ineffective governance on controlling spending.
Do you think the cost of these $ Billions of share buybacks is buffed into WAG's "cost" which prevents it from matching prices on reduced ESRX reimbursements that Walmart, CVS, Rite Aid and most independent pharmacies seem willing to accept?
Who benefits more from these share buybacks... investors ina long term "hold" that must look at the likely S/P in the post=ESRX era after 1/1/12... or WAG executives with option share grants that vest based on S/P at the close of the fiscal year on 8/31/11, the close of Walgreens FY... well in advance of the envisioned impact of WAG losing the ESRX business?
How much of Walgreens inability to match competitively lowered reimbursements that are readily accepted by retail competitors is because of $ Billions in share buy backs instaed of maintaining its market share by staying competitive?
As has been published many times and your past posts share, Corporate share buy back do little to improve growth and is used mainly to gin up the balance sheet.
Walgreens reports it has under 8,000 stores and 200 thousand plus employees.
big.yank, how about your view on where Walgreen's business decisions have wasted opportunities. Beside Home Infusion and D/R buy and the PBM(WHI) which I belive was totally mismanaged..l the growth of revenue by Medco, ESRX, and Caremark makes this point..Whats your idear's ??