90 day scripts @ reduced retails? NO PROBLEM!
Generics @ huge discounts to retail pharmacyland? NO PROBLEM!
Pills from Canadian Pharmacies at HUGE discounts? NO PROBLEM!
PBM's requiring mailorder fulfillment for reimbursement? NO PROBLEM!
View that Medicare and Meduicaid will potentially only pay for scripts by mailorder:? NO PROBLEM!
No sweat, dudes. It only poses a problem for small box pharmacies like Walgreens! There is NOm, or scant problem with these marketplace dynamics if you invested, elsewhere! OR... if you are SHORT this WAG-disease!
Mail order was the "end of the world for drug retailers" 10 years ago.
Yet somehow Walgreens sales and profits are breaking record after record.
The first quarter of fiscal 2011 showed a whopping 19% increase in Earnings.
Both January and February Sales blew the analysts away!
You see. Your posts have never had an ounce of substance and that trend continues.
Nice try, though.
Really, dude, you just make this too easy!
Rx mailorder by PBMs was introduced, as I recall, by EHS (Eckerd Health Systems), prior to their acquisition by RAD, in the 80's. And mailorder is STILL a game changer.
As for your convenient dismissal of Walmart, they have grown to the #3 position in mkt share in a very short span of time.
I DO remember when Walgreens stock went "zoom" and also when it used to regularly split. But that was in the era before Walmart, mailorder, $4 generics!
Today: "It stinks in here!"
Ok, DSCM is a stock you would short and not on your list..
Then again, D/R had it gone public would not have been a stock you would have favored, yet when Walgreens bought them out and projected them to be accretive to earnings you are on board..
Excluding DSCM, and projected market consolidation in this sector
could there be mail based acquisitions in the future for Walgreens??
What we Know.Is it so?
Yank gave a good estimation of market share for this sector and the growing elephant in the room, Mailorder pharmacies are closing the gap with CS pharmacies.
And as Buffet said, there are plenty of Cigar Butts on the floor good for one last puff.
Consolidation in this sector is occurring with opportunities to purchase the next buyout target.
Retail Store build-outs has not stopped the mailorder growth in the battle for market share and supply chain management.
Yank point is on target and you and I are in agreement on limited networks and supply chain accountability, so what we know may bring us to the sub-sector industry group.
And as the market shows us.. when a M&A happens money flows into that sector...
Note: B/C B/S for profit Sub. is seeking to limit MD access with the use of Nurse Practioners..
Limited State buy-in occurring..
The easy money is already off the Monopoly board. The largest, available M&A candidates are spoken for: Long Drugs and Duane Reade. The mid-sized deals like Happy Harrys and Osco were consummated, earlier, so what remains? Indies. Mostly small ones or those with but a few stores. Drugstores with a family feel, better service than Walgreens or CVS, and with, in many cases, a pharmacist's direct connection to the families and communities they serve over more than 1 generation.
WAG has announced its intention to jettison its PBM position. PBM = mailorder. No growth opportunities, here, for Waggies.
So what remains? Rite Aid... a wholly unlikely M&A candidate based on FTC concerns and dimension of debt required to pull off a deal... at least $15 billion, as I earlier estimated.
All said, other than more, new retail stores, Walgreens only prayer to avoid shrinking Rx market share involves one or more of the following, radical changes:
1. A completely new Board with the vision to redirect this dinosauir.
2. Someone like Buffett, Soros, Carl Icahn or even Eddie Lambert taking WAG's exec team out and replacing the whole sorry lot of visionless pharmacists with a Chainsaw Al type that can once-and-for-all GUT the SGA anchor.
3. Being taken over by Walmart who knows how to compete and CHANGE in a reordering marketplace.
4. Rite Aid goes bust. A ghoulish and foolish strategy to count on, if you are Walgreens.
Ain't much else there that I see!
Your figures are WAY off in Rx market share. Here are the correct totals:
All others: 2%
Market share is important but here is something that I am seeing.
A blockbuster PPI paid something close to 200 a couple months ago, today its less than $10 for a 30 day script. At less than 10, just how much profit can you possibly make given cost to dispense.