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  • cmxgen cmxgen Nov 21, 2010 1:24 PM Flag

    PBM To small

    ESRX will pick it up, I doubt SXCI or anyone else is really interested.

    ** WAG should be able to meet SG&A goals. They will cut the RPH and techs at stores. Expect no raises and/or bonuses at store levels. RPH saturation has occurred, new grads are offered part time positions and with more schools with larger class sizes expect WAG and CVS to offer less and less wages and benefits.

    I always said at some point the retail transaction piece can be more profitable than actually dispensing the RX. MHS sees this and will capitalize on it. WAG I bet also wanted a premium on their PBM. Moreover, I wonder if the relationship isnt as strong between the two powerhouses. Recall when CVS and CMX came together, there was speculation that MHS and WAG would get married, I doubt WAG wanted anything to do with MHS. MHS has since moved on and gotten stronger having taken from CMX (FEP and Cali).

    WAG has yet to understand how to encounter the fact that lower reimbursement are on the horizon. As GDR will hit 80% soon, what will be the profitability on generic scripts? Consolidation in the generic industry, and lack of foreign generic company market share, will squeeze WAG. Note Teva is 1/3 generic RX scripts.

    No wonder the CFO drinks!

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    • Hey Cmxgen

      "Were open to a PBM bolt on". "It's not large enough for us to get distracted from other very large things we're working on.

      Above are the 2 Quotes from the CEO of Medco,
      Sounds like Walgreens wants to sell a striped-down PBM in its offering.

      Which will make this harder to sell to other interested parties.
      I have little doubt that the C-suites where talking to each other about this sale.

      But the Question of why did Walgreens CEO.. Say to Credit Suisse Analysts he does not respond to rumors or speculation.
      This question was not asked by a reporter or Real Estate broker.

      It was ask by a respected analyst who was attending a Conference that was promoted as providing guidance for the investment community..

      The answer is there...
      I will get back to this later..

      • 1 Reply to robbsbeach
      • Keep in mind WAG PBM is 9 Million covered lives as noted on their website.

        * MHS can target WAG PBM clients. Why pay for the business when you can earn it. WAG has gone out there and said they are selling the PBM which means any employer contracted with WHI is already shopping for another PBM??

        ESRX I think will pick it up cheap because no one else is in the store.

        Hope everything is going well for you!