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xpbmer 10 posts  |  Last Activity: Mar 5, 2013 7:44 PM Member since: Feb 21, 2006
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  • xpbmer xpbmer Mar 5, 2013 7:44 PM Flag

    Problems are two-fold. 1) Express Scripts and other PBMs have excluded WAG from many preferred networks, which are becoming a large part of PBMs' total business mix. So even if the PBM contracts with WAG, it doesn't mean that WAG has access to all or even most of the PBM's members. This was largely self-inflicted by WAG as they essentially proved that Express Scripts would be just fine without them. The fact that leadership was not fired over this bonehead move led me to sell all my WAG stock.

    2) WAG is paying a $25 bonus for patients who transfer scripts to WAG. This will help slow top-line bleeding, but the expenses associated with this could add tremendous costs and am not convinced that it will be a net positive investment over time.

    Sentiment: Strong Sell

  • Information below from Q&A during May 11 ESRX earnings call. Note how personal Paz's comments are about WAG. These comments from Paz are hurting WAG's stock - make no mistake about that. What galls me about this is that Wasson and other WAG leaders first made this issue personal by attempting to fight ESRX in the press and through weak attempts to influence ESRX clients to break rank. WAG shareholders are paying a steep price and I cannot understand why the BOD has not yet made changes at the top of the organization. Without swift action, it will only get worse from here.

    Express Scripts ESRX
    Q1 2012 Earnings Call Transcript
    Robert Willoughby - Bank of America Merrill Lynch: Okay obviously you mentioned no plans for the Medco pharmacy networks here. A, would you – do you have any say on that front or B, if you do intend to make some changes wouldn't you actually need to notify clients?

    George Paz - Chairman and CEO: Well, it depends, I met with a whole host of clients not too long ago, maybe two, three weeks ago and kind of explained to them, the cost differentials by including Walgreens. There's the misnomers out there that somebody who runs a pharmacy chain up in Chicago was saying that, it's $1 or $2, doesn't matter, when it's only 20% of your total network. Well, it matters a lot; because what that does, is it sets the pricing level. Again, when you are paying one person a premium over others, you are forced to put some price pressure on the entire network. Even if it's a few cents, it all matters, it's all relative to the value you are delivering, and I think that there is – again there is a (paid for) performance standard. If we could just come up with ways to help actually drive down costs, improve it here and just do things that are out of the ordinary course of the books, we are willing to pay for those, if our clients are willing to pay for those. But we are not just willing to pay for doing nothing special, if we are not doing anything different. So when we go out to the Medco clients, the Medco clients themselves, as we are going through this process, and again, we are very early on here. Several of them have already selectively chosen to drop Walgreens themselves, so that will be occurring here shortly, and that's their decision. When that occurs, there doesn't have to be any notice, they just do it. If we were to decide to drop them, that would require notice, as we have to go through a process, we are still evaluating all that.

  • Reply to

    Let's Oust Wasson

    by arkkaz2001 May 2, 2012 10:42 AM
    xpbmer xpbmer May 12, 2012 9:55 PM Flag

    "We don't believe the lack of WAG in the network is having any meaningful impact on ESRX's results," Cowen & Co analyst Charles Rhyee said in a research note.

    We can thank Wasson and his lackeys for helping prove that a prescription drug benefit plan doesn't need WAG in their network if the price is right and WAG was the most costly chain in the ESRX network. Narrow pharmacy networks will now grow in popularity with other PBMs and health plans, so further exclusion from pharmacy benefits is in WAG's near future.

    Part of running a company well is anticipating the second and third moves after a major strategic decision. Not only has ESRX proven that they don't need WAG, ESRX has merged with Medco, so WAG's exclusion from the pharmacy network is greatly magnified. These idiots running WAG HAVE FAILED THE SHAREHOLDERS AND MUST BE FIRED IMMEDIATELY!

  • Reply to

    Let's Oust Wasson

    by arkkaz2001 May 2, 2012 10:42 AM
    xpbmer xpbmer May 2, 2012 11:59 AM Flag

    You are spot-on. Shareholders have been screwed by WAG's incompetent, short-sighted, egotistical leadership.

    Since ESRX has proven that WAG is not needed to have a viable network, WAG is in the unenviable position of having to accept a lower rate than originally offered by ESRX to get back into their network. And this is after wasting millions of dollars before the first of the year in a vain attempt to retain the ESRX business.

    So stupid. It was the probably the best thing to ever happen to CVS, Target and any other chain you care to mention.

  • Reply to

    Board of Directors meeting this

    by ur_m1ni_me Apr 2, 2012 5:22 PM
    xpbmer xpbmer Apr 4, 2012 3:03 PM Flag

    Agree 100%. WAG management is arrogant and has always used a "my-way-or-the-highway" in negotiations.

    They naively thought that ESRX couldn't survive without them in their pharmacy network. On the medical side, health plans always offer preferred, limited networks of physicians and facilities, so why wouldn't it work in the pharmacy business?

    These guys have to go. Their arrogance has cost shareholders way more than what they would have lost had they just signed ESRX's original offer.

  • Reply to

    WAG and ESRX .. what a horrible mistake!

    by tenmilevol Feb 27, 2012 3:26 PM
    xpbmer xpbmer Mar 1, 2012 3:42 PM Flag

    Agreed. Horrible/arrogant management who didn't see that their futile efforts to hurt ESRX would actually benefit their competitors immensely. Ask anyone at CVS, Target, Wal-Mart, etc. what the best thing to happen to them in the past 10 years was - they'll say it was WAG splitting from ESRX.

  • Reply to

    If mhs merger fails.

    by cmxgen Feb 7, 2012 10:49 PM
    xpbmer xpbmer Feb 15, 2012 10:36 AM Flag

    A much more likely scenario (though still unlikely) is WAG buying MHS. Medco is in serious trouble due to the loss of large accounts like FEP, CalPERS and others. The CalPERS loss was precipitated by improper dealings between Medco and CalPERS board members.

    Snow has to go and if the ESRX deal falls through they will desperately need a white knight. But what makes this unlikely is that WAG recently sold their PBM business, so for them to buy MHS would be a complete 180.

    However, they need a complete 180 because they were clueless in how they reacted to the ESRX negotiations. They clearly have wasted more money trying to hurt ESRX after the deal fell through than they would have given up had they accepted the original deal. Idiots.

  • xpbmer by xpbmer Dec 6, 2011 1:38 PM Flag

    As a long-time investor in WAG with a significant investment, I am disgusted by management's extreme stupidity in dealing with ESRX on their contract renewal. ESRX probably controls about 15% of the prescription drug benefit market and while I don't personally think the ESRX-MHS deal will be approved by the FTC, it would have about 30-35% of the market if the deal does go down.

    WAG does have a strong reputation among health plans and other payers, but any idiot knows that we don't need multiple retail pharmacies on every urban street corner. Fact is, ESRX will have minimal revenue loss without WAG, but WAG will be hurt so much more. Furthermore, if WAG is not in ESRX's network, it loses leverage in future negotiations with other large PBMs (although they recently renewed with Caremark) because they will know that WAG can't afford to be kicked out of another major pharmacy network. I also think that the closer we get to the year-end deadline for a new contract, the more leverage WAG loses with ESRX as ESRX is clearly willing to go ahead without them in their pharmacy network so WAG may have to give up more than they were originally offered.

    I'm not saying that WAG should have rolled over on ESRX's first offer, but this is extremely stupid behavior for a company in a highly competitive market with easily implemented replacements.

  • I've had a relatively large position (for me anyway) in WAG for 10 years and have been generally pleased with its performance until this year. Their longtime strategy of outbuilding competitors on new stores has grown old and tired. (And who needs a pharmacy on every corner with scripts increasingly distributed via mail order?)

    The bottom line is that they've lost industry leadership where it counts - strategy. Everybody stumbles on execution now and then, but your core strategy has to be sound and demonstrate leadership. As everyone knows, they've recently jumped into retail clinics - but in response to CVS. So, as a follower, WAG is now in a race to outbuild competitors on in-store clinics!

    They've got to change the way they do business and become more innovative. For starters, they should not offer anything above a baseline discount to remain in CVS-Caremark's pharmacy network. If CVS-Caremark kicks them out of their network, let the fireworks begin. On the product/service front, they should come out with something new and exciting - such as offering free home delivery within a 2-mile radius on scripts dropped off at retail stores for consumers who don't want to wait for it to be filled, et cetera, et cetera.

  • Reply to

    Customer lawsuits

    by manuel613 Feb 19, 2006 3:12 PM
    xpbmer xpbmer Feb 21, 2006 12:33 PM Flag

    In most plan designs, when mail service pharmacies fill only a 30-day supply it is a huge member dissatisfier. Most plan designs are setup to have a mail copay that is about 2.5 times the retail copay. The member then gets a price break on a 90-day mail supply vs. a 30-day supply from a retail setting.

    As in your case, this breaks down if the member receives only a 30-day supply from the mail service pharmacy, but is charged 2.5 times what would be paid for the same amount of Rx from a local pharmacy.

    A well-managed mail service pharmacy would have notified you that your script was only for 30 days prior to filling it. I am surprised that Medco would have shipped the 30-day supply without notifying you in advance, because this issue is well-known and they are among the best mail service pharmacies in terms of customer satisfaction.

    I am fairly certain that if you contact Medco that they would find a way to rectify this situation to your satisfaction.