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Walgreen Co. Message Board

  • robbsbeach robbsbeach Apr 3, 2012 1:50 PM Flag

    Esrx merger update:

    Esrx under FTC rules now is able to speak out about the Merger, and is looking forward to the integration of healthcare services with Medco's business units,
    that are seeking to reduced the 19% of GDP spent on healthcare services today, and projected to increase US GDP spend going forward.

    On a second point of interest, a federal lawsuit has been filed against this mergers closing, by several vested interest groups.

    When Esrx was questioned about Medco's existing contracts moving forward, Esrx responded by indicating this is a focal area of interest, that will be addressed systematically in reducing spend.

    Milo , Cmxgen, big.yank or other interested parties if you are reading this post,
    What are your thoughts, looking at a supply/demand bell curve model, reducing the average costs over the next two years is this possible???.

    Sector profit/rotation is this the new outlook, if so, what industries will be the beneficiaries. ???


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    • Cmxgen:

      Here is a primer on the article I was referencing
      Managing Specialty Pharmacy Costs Requires Integrated Pharmacy And Medical Data: Study.

      The M&A value in this sector requires a special knowledge of Medical costs and health care services in populated area's.

      I question if M&A's experts understands the feeder system, and is this beyond the valuation scope of current buyout methods!!!

      Your thoughts Cmxgen!!!

    • Cmxgen:

      I read a interesting paper recently on Specialty and reducing these cost also.

      I'll have to find it again, Esrx/MHS has been doing some studies on this subject
      as well as ADAM reported this small market with the highest cost/profit.
      States are now seeking laws to reduce co-payment escalations for folks who have little choice in therapy options..
      Caremark was the leader when it was spun off from baxter pre CVS..


    • Robb

      Keep in mind CVS/WAG are out to cut costs, so as much as they value the PharmD, they don't want to pay.

      Its about specialty in the near future.

    • The largest merger of 2 PBM's was approved after a congressional hearing and 2 reviews by the FTC who looks at anti-trust issues.

      The merging companies stated during congressional testimony, that independent pharmacies would not be affected but enhanced, by working on the goals in cost reduction.

      Cheap imported Drugs from India and soon China, reduces income for these business, however it increased gross profits at Walgreens , CVS and Walmart as reported from Interviews.
      Several Cost Studies on medication compliance and patient management issues
      have also been reported by Health Insurance companies that are Faced with Drug Inflation issues for their aging members.
      A major contract has been lost (MHS) as these Insurance Corporations bring outside supply services under there control.
      Mergers in this sector have now reported less costly alternatives to reduce costs for maintenance medications for the 10,000 a day seniors who are moving into Medicare coverage by filling Rx's for 90 days vs 30 days.
      The question is do these seniors need more than 65,000 Rx retail locations or more effective Communication and monitoring with their primary care providers as healthcare spend is projected to increase GDP as reported by Forbes ??

      And overhead costs with additional CDS M&A's, are they the drivers in current cost reduction efforts?

    • Lets do it.

      However, the wave of reimbursements is caused by cheaper and cheaper generics from India, and soon China.

      retail is getting squeezed because of trending higher costs and lower reimbursements; retail needs to see at least 10% prescription growth to offset without increasing over head costs.

    • "Should you care to discuss the Outlook of Walgreens and this sectors growth with Strategic opportunities, there are many of us who would be pleased for added discussions."

      OK.... A discussion on how the Affordable Care Act (Obamacare) changes the dynamics of the Pharmacy Supply Chain and the risks and opportunities it foreshadows for its investors would be a great topic indeed.

      Lets start a new thread with some basic ground rules..

      Rule 1. Cite facts and sources to support your opinions and conclusions.

      Rule 2. No personal attacks.. Let's keep it professional. If you disagree. Just state it. There is no need to go on a rampage.

    • Blah, Blah, Blah, Expert

      1) The Investors may not Know what retention refers to,
      in disease progression and market retention.

      2) I worked in this Industry as a Chief Cook and Bottle Washer beginning at American Hospital Supply, not as glorious as a M&A expert or Analysts.

      My Financial and Strategic outlook is based on the Medical markets with payers groups and elastic reimbursement levels in managing healthcare cost structures
      Which is much different than looking into leases, operational cost structures, inflated market shares, licenses, legal issues, EDITDA, ect.

      Not that these issue are not important, but they rely on factors that will change with Obama-care. IMHO.

      PBM's and lower cost methods of providing monitored health services, of which you should take into account, are in this generation of sector developments.
      Should you read the Headlines.

      As for the Sellers side of a M&A a weakness exist, and is very often under projected with the buyers revenue projections, and left to the janitors to clean up.

      1) RAD purchase of Eckerts with the advice of selling their Mail order/ PBM..

      2) CVS Caremark integration and the expensive learning curve of the Buyer.

      3) Duane Reade purchase by a Private investment group..

      4) I can go on. into Blackrocks purchase, ect.

      Should you care to discuss the Outlook of Walgreens and this sectors growth with Strategic opportunities, there are many of us who would be pleased for added discussions.


    • Blah Blah Blah...again

      Further confirmation your understanding of the sector and business is superficial and is not helpful to most of us who monitor this board.

      Example 1. "value the loss rate"??? in the industry it is called retention.

      Example 2. Working for the biggest players in the industry without citing the position or role lacks a lot of credibility. You could have been a receptionist or far as we know versus an advisor on a "500+M deal".

      The valuation of an acquisition(in most cases) is both financial and strategic. The most successful acquisitons are priced to accurately reflect the inherent risk associated with achieving financial and strategic synergy's and the integration of the acquired company.

      A great benchmark for investors is to understand the purchase multiple versus sales and EBITDA relative to other acquisitions in the sector. (It would be helpful for your investing if you did some research here)

      I hope you find the information helpful.


    • Ok. Good luck.

      I don't trade wag I was responding to some negative comments towards me. There is plenty of business out there.

      I trade oil futures, just got stopped here at 102.30. Was short from 102.85 4 contracts.


    • Hey cmxgen,

      Learn some economy 101.

      Do I have to remind you that

      1- WAG has been having 37 consecutive year of record sales and earnings.

      2- The most innovative drug store, with first to adopt new technology and softare. One that started drive-thru in 1992.

      3- Over 100 years of business excellent.

      4- Its non-pharmacy items alway outperforms competitors.

      5- The one with the most with internal growth and expansion.

      6- The best store layouts.

      7- The best product mix.

      8- The most with share reduction and very active buyback (5.2% share reduction in 2011).

      9- The best and highest dividend.

      10- The best balance sheet among drug stroes.

      Do you want me to continue.
      Today, I went to a WAG store in Tustin California. Parking lot was almost full and at least 50 customers inside(this is a small size store but with very modern building).

      I talked some friendy workers who said it was very busy day.

      I loved the store layout. It was very relax environment and everything was easy to find. I did not go to buy anything but check the store. You know what, I spent about $90 buying some vitamins and other stuff.

      I hate when I go to CVS or RAD. They look like a warehouse. They are not as organized as WAG.

      Please, keep those comments to yourself.
      I asked my family and friend to go only to WAG stores from now on.

      By the way, there was a sign that says WAG pay $25 for people who switch to WAG.

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