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Walgreen Co. Message Board

  • cmxgen cmxgen Jan 27, 2012 9:35 AM Flag

    robb read this

    check out adam's blog. looks like a push to decrease COGS.

    Big customers may be consolidating, e.g., Express Scripts and Medco Health Solutions, Omnicare and Pharmerica.
    At least one major pharmacy chain is exploring more direct purchasing from brand-name manufacturers.
    Some retail chains are reconsidering their usage of wholesaler generic programs
    Wholesale customers are feuding. The Express Scripts/Walgreens kerfuffle has already forced one wholesaler to choose sides.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Cmxgen:

      Walgreens and CVS I believe are the largest retail purchasers that use Cardinal.
      See Cardinal's report.

      Esrx also uses Cardinal, I read somewhere.
      Medco use another wholesale supplier that should the M&A go through might lose this business.

      So, there is a play on wholesalers and market share.

      I think CVS/Caremark is the Chain looking at a closer manufacturing relationship due to the PBM component and the Recent lipitor deal worked out with the other PBM's.

      Leaving Walgreens to choose going direct with a manufacture or seeking a better Cog contract with its wholesaler.

      What is you view on this..


      • 2 Replies to robbsbeach
      • WAG/CVS has 50% of CAH business.

        ESRX uses CAH.
        MHS uses ABC (18% of ABC is MHS)

        Adam said a wholesaler was put in the middle of ESRX and WAG.
        Lets assume CAH.

        I dont understand how CAH is in the middle of this? I am not sure why WAG brought the ESRX/CAH relationship into this, unless, if the ESRX/CAH contract is better than ESRX/WAG.

        On 1 billion of purchases, a 100 basis point improvement in brand purchasing is equivalent to 10M dollars. How many billions does WAG buy? WAG I think will go hard at CAH to make up for ESRX lost business, however CAH wont budge because if they do, they have to give CVS a better deal.

        Complicated stuff!

        If we assume WAG Brand purchases are 20B or 30B, we are talking savings of 200M or 300M with 100 basis point improvement.

        MCK was at cost minus 5 and change with who knows...its all about purchasing.

        On a side note, I was able to offset my state's reimbursement pressure with a better purchasing deal going forward..

      • Robb,
        until you learn to properly communicate your misguided "thoughts" I can't comment on your foolishness.

        Low regards

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