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big.yank
As students of investing and Corporate planning, all senior executives in Major Companies understand what products, increase revenue. (Adam Smith 101 supply)
This is part of the distribution/supplier negotiation process.
This planning even moves into the expense of SG&A costs for marketing..
If you were manufacturing/producing traditional light bulbs
and the consumer shifts to LEDS would this not be a major
failure on the part of a Executive management team, to not see this???.
The Executives job is to meet demand through planning and maximise the profit from the demand, including other fuctions, IMHO
Zombies are now suddenly appearing in US major cites, but price inflation is under control with Ben at the controls of the Fed.
WHy is this important??
I believe TriCare understands the cost savings that the US tax payer will see... with its announced decision on who they will purchase Rx's from, and I think CMS is next.
Price inflation or price compression, you decide in this global market of Generic Rx manufacturers.
Congradulations, on your new Home!!!!!
Regards,
Roxy and the US Goverments investigation:
http://www.gao.gov/htext/d04110.html
Recently the US goverment suspended Walgreens distribution
License in flordia for Class 2 drugs..
The Miami DEA stated they will be going after those folks that "Chose to look the other way".
GLTA..
Pin the Tail on the Donkey,Yahoo:
Hi Guy's, and any Ladies if you are reading this.
Walgreens Fiscal 2012 4q and full year results, shows an amazing
slide of hand from a Zombie Corporation and its leadershiip.
This is a Quote from the Walgreens Company press release, less the noise.
"Net earning in accordance with GAAP Accounting principles for fiscal 2012 4th Quarter earnings.... were 353 Million..., compared with 729 Million in the year ago quarter".
Walgreens CEO announced that these sales/earnings were nearly flat.
Last years(2011) 4th quarter results Excluded an after tax GAIN from the sale of WHI.
..or its tax impact which was a negitive 4 cents per dilluted share..
or the 5 cents in aquisation related amoritiztion costs.
Walgreens Operating income was 4,365 billion in 2011 vs 3,464 billion in 2012 a <20.6 % loss.
They Must be running out of assets to sell!!!!
That is on the first 2 pages of their press release, iTs get better as you examine the numbers for LIFO Inventory accounting.
2011 vs 2012.
As creative accounting lives in this place for LIFO accounting!!!
Seperating the strands of Speggetti form Walgreens Co. Earning statement is what we should focus on, in finding a realistic valuation for Walgreens.
This can provide a Valuation of Walgreens managements structure, strategy and operational proformance or lack of in the last few years..
The Alliance Boots merger was a wake up call to the investment managers and analysts..IMHO
As for Cmxgen's comment on the profitabilty of Class 2 Controls, just search Perdue's missle launch of Oxy and its growth from 1+ billion in sales(6 years ago) to over 13+ billion today.
That excludes subsitution sales from the Generic manufacturers.
2 Perdue Exec also went to jail over this drug.
And now Prude is testing Oxy with children, with a patent extention.
Is there any quesions why the DEA tracks this drug???
There are serious uses for this Drug, However, the use has out paced the growth in all medical data that the US goverment & Insures uses in setting medical rates.
GLTA!!!
Walgreens earnings Tactic?
When I think beyond a Walgreens earning tactic, with a A/B revenue
enhancement, what I see, is Walgreens managers, have failed Strategic planning 101,IMHO.
What I am seeing... is a privately held Corp., Alliance Boots strategic growth planning opporutunity... that may have been lost
if Capital were deployed else-where.
The A/B Chinese investment, must of had other suitors willing to close on this partial sale.
And the newest members of the Walgreens BoD's including a New Board Commander, who surly discussed the opportunity of where A/B earnings could best be used.. for long term capital growth, from the single largest Shareholder viewpoint and Walgreens announcement in growing global markets..
Many Analysts where also confused on Walgreens earnings score card, and the questions asked and answered were unfocused with the exception of Scott M.,
Uncertainty, I believe may come into play shortly, as europe focus on spending cuts and Walgreens plays catchup from the 2012
line in the sand trap.
Now, that you are becoming a Floridian, I hope you don't golf with anyone named CHAD...
Regards,
IRANs Mahmoud Ahmadinejad's Aides Go On NYC Shopping Spree To Walgreens:
Welcome back big.yank, While you where away Milo, has booked some nice cash from the run-up in Walgeens S/P.
Myself, I'm waiting this dividend addiction crawl by the M&M's out. Some M&M's see a hole in one, I see a hole in projected earnings from the Tricare announcement. and only now, other large payors are releasing the news of Walgreens exclusion in go forward Contractor provider agreements.
Projected Medicare & Medicaid Rx cuts are also being negotiated-out by both political parties, ref: the Tricare announcement and the ESRX/Medco merger approval.
Walgreens has created a plate of spaghetti with M&A's over the last several years with the A/B merger being the latest.
I would think the Largest holder of Wag Stock is not pleased with the planning under the Obama Care Act.
Perhaps the Iranian's government official's who shopped at Walgreen's this week liked, the Armageddon scenario posted and are Pleased, Walgreens willingly accepted Iranian's money over TriCare's Military personal's offering.
Ross Perot once said the devil is in the details, so Tomorrow we may find this out.
Regards,
Excellent Milo:
You have played this trade with a steady conviction.
WSJ today has a statement from Wags CIO, about the DEA's
Drug diversion investigation.
He floated a inside job defense, also the article implied the DEA has been looking into the supply chain data available to executives who are responsible for risk management and financial controls.
Might see some early retirements..
Did you look up Cardinal Health's defense hearing and outcome with the DEA???
Like I said, about 3 months after the settlement, with plenty of time for the big investors to hedge there investment the S/P of CAH dropped.
Might be SOP for the big funds, My buyin price will come.
GL.
Milo,Cmxgen and big.yank:
The biggest failure that a investor can make is
Relying on Money Memory.
This causes a Investor or business to think of the past instead of focusing on the Future, leading into "Analysis Paralysis".
Alliance Boots, CEO recently made a presentation on the Globalization of the Retail Drugs supply sector, He showed a compelling understanding how quickly this market is changing for the consumer.
His outlook was also more realistic in the Euro-revenue story for this Industry.
Friday Mad Moneys host a former GS manager, gave advice on Walgreens current selling price.
I would also take some money off the table after the A/B price Run up, and looking at Fridays closing/after-hours pricing, the Impasse will sting Walgreens numbers going into 2013.
Walgreen (NYSE: WAG) had its neutral rating reissued by analysts at Credit Suisse. Credit Suisse currently has a $38.00 target price on the stock.
This was released 45 minutes ago, without access to the analysts full report this leaves one to speculate on what they may know and are not releasing.
Comments welcome
Why No TriCare:
Walgreens prior, to the Esrx settlement stated that Tircare
Members would recieve Rx discounts better or equal to any other offerings by Rx suppliers if TriCare allowed its members to access Walgreens Rx services!!!
Yet, TriCare about 3 weeks ago announced that ITS members will not be using Walgreens as an medication supplier for its 6 million members ???
Something had developed... that we have overlooked, and the mailorder cost argument has no merit with the published record.
Comments are Welcome!!!!
Thanks for the Information:
As I been telling Milo, My own option trading skills are limited
but they are evolving.
My experience has been mostly buying and selling shares; on the option trades, I had help.
So, any information you care to share on option trading, will be appreciated, as we discuss the opportunities in this sector and the events that create volatility in pricing short or longer term.
It appears P/R noise is being created, prior to the earning conference call, that may divert attention away from the more important issues that we need the analysts to ask on our behalf.
Alliance boots synergy's will no doubt be the prepared focus with Walgreens new appointments in growing revenue.
Also the discount card... Blah Blah Blah...
TriCare will also come up and the Esrx/Medco patients swarming back projections.
Its to bad we can't drill down to the 65% revenue drivers and the
Rx synergies with the latest disruption, and how that will impact the more profitable combination of Rx treatments used today.
Whats your thoughts?
Milo and Wickedone:
My impession of todays announcement, and then onto discussing Nov's Out-look.
Walgreen CFO, a member of the Esrx impasse team will be expanding his role as president of International business with the CSO a second member of the impasse team, who both have been promoted, the later, leading Global Megers and Aquisations for Walgreens.
The part left-out, of this P/R announcement was Goofy, who is still un-named, and will lead as CEO, Chairman of the Musical chair committee, and Global Rx Zar.
The is the most exterme case of the P/R being ahead of Reality, that has been released to date.
Walgreens only has a 45% stake in A/B with a un-executed contract, Walgreens now wants to take credit for S. Pessina/KKR's accomplishments in China....?
This is beyond Huberious, Walgreens is now entering dillusional
P/R spin.
Now, I would like to move forward into Novembers options. Walgreens has registered 12 distrubuition centers with the DEA that control 65% of their Revenue.
1 more maybe added in time, with their recent purchase.
However, a DEA Administrative hearing has yet to be set for one of their largest Wholesaler distribution centers,, which currently has been declared a "threat to public safety".
The evidence presented by the DEA is shocking to say the least.
With this Warehouses largests sales driver being offline, Walgreens revenue will be impacted, (Ref. CAH argument with the DEA on the Lakeland Rx Warehouse).
Without a DEA licensing Hearing date, and the finalized Judgement, your odds of Winning this bet are very slim, you are better off going to a Monte-Carlo Casino and enjoying the Vacation.
GLTA,
Milo:
Do you have a update on the Walgreens options out-look post Q4.
BOL.(Best of Luck)
It appears Target is confidant with a new business plan in setting up pharmacy's with its traditional business model.
Targt may be courting the PBM's for that increase in Traffic flow
for staple offerings with medications
Just after the ESRX impasse, Walgreens does it again, this time, I think the Analysts are way off the mark on todays pricing adjustment.
Do you also think there is more downside on Wags Selling Price???
Regards,
Wickedone;
The Alliance Boots billion dollar spend is a Done deal with the first traunch paid for by leveraging Walgreens assets.
The thought of AB taking charge!!! that is why I bought KKR.
The Walgreens outlook is under developement, and with Fridays DEA announcement on a Walgreens Distrubution Center failing Due Dillagence in the Control of addictive Narcotics into Diversion. Well, Your in the Business, would this concern you as a licensed Rx Provider???
In today's world, the DEA is no longer going after, just the licensed pharamcist.
CAH had the Former head of the DEA defending their most recent charges and he and his team took the DEA's settlement offer.
This time, a Wholesaler may not recieve such a generous offer in a election year.
I'm looking forward to Adam's outlook on this, after defending Cardinal position.
Hey, was that the new Target store featured on youtube, that just opened in Chicago across the street from Walgreens??
Regards,
Greetings From China:
Alliance Boots GmbH, the largest U.K. drugstore chain, will buy a 12 percent stake in China’s Nanjing Pharmaceutical Company Ltd, for about $91 million dollars, it said in a statement today.
Pessina said the firm is likely to expand in Latin America through direct investments similar to its deal in China.
In Southeast Asia, Pessina said he will look to distribute products through franchises for the moment, similar to a model already used in the Gulf states.
Alliance Boots is still Owned by Mr Pessina and KKR.
Walgreens who took a 45% stake in Alliance boots could not be reached for a comment...That is my guess.
Jim Rogers, a Well know American investor, who is frequent guest on American television is currently living and investing in China's growth, it appears these lucky sperm club members shop for Value when they go abroad..
GLTA!!!
Greetings From China:
Alliance Boots GmbH, the largest U.K. drugstore chain, will buy a 12 percent stake in China’s Nanjing Pharmaceutical Company Ltd, for about $91 million dollars, it said in a statement today.
Pessina said the firm is likely to expand in Latin America through direct investments similar to its deal in China.
In Southeast Asia, Pessina said he will look to distribute products through franchises for the moment, similar to a model already used in the Gulf states.
Alliance Boots is still Owned by Mr Pessina and KKR.
Walgreens who took a 45% stake in Alliance boots could not be reached for a comment...That is my guess.
Jim Rogers, a Well know American investor, who is frequent guest on American television is currently living and investing in China's growth, it appears these lucky sperm club members shop for Value when they go abroad..
GLTA!!!
Milo For Your Eyes Only:
From The DEA,Gov Web Site:
"The number of Walgreen pharmacies purchasing enough oxycodone in Florida to make the DEA’s 100 top list rose again by May of 2012,
with eight of those 58 stores making it into the top 15 spots on the list of 100—and
five of the 52 stores making it into the top 10".
"Since 2009, Walgreens Jupiter has been the single largest distributor of oxycodone products in Florida.
At about the same time as the abuse of prescription drugs became an epidemic in Florida, Walgreens’ Florida retail pharmacies,
supplied by Walgreens Jupiter, commanded an increasingly large percentage of the oxycodone business.
In 2010, only three Walgreens retail pharmacies were in the top 100 purchasers of oxycodone within Florida.
In 2011, 38 Walgreens pharmacies made the top 100 and six were in the top 10.
Through May 2012, 52 Walgreens pharmacies are in the top 100 oxycodone purchasers,
eight in the top 15 and five in the top 10".
" According to DEA records, in 2011, Walgreens operated 7862 retail pharmacies in the U.S.
and 16 of the top 25 largest oxycodone purchasers by Walgreens retail pharmacies,
including the top six purchasers, were in Florida and supplied by the Jupiter Distribution Center.
In 2011, the average pharmacy in the U.S. ordered approximately 73,000 oxycodone dosage units".
Walgreens said in a statement that it has taken steps to bolster its monitoring and reporting of controlled substance purchases.
The number of tablets dispensed by its pharmacies dropped 35% from June 2011 to March 2012, the company said.
"We take our obligations under the Controlled Substances Act very seriously," the company said.
The DEA issues immediate suspension orders when it believes a registrant, such as a pharmacy or a doctor, is "an imminent danger to the public safety."
All claim checks have now been settled.
AS you know I'm not holding this stock at of today, and I have no bias as to where Walgreens price settles.
Good luck with your skills.
What the DEA has been tracking, is more than the reported press releases, go to the DEA.gov web site for a eye....opener.
A smart invertor would google Cardinal and the problem they faced with their 2012 drug diversion settlement, also their top legal Executive who agreed to a license suspension ..
This being a POTUS Election year, My view is all political rain checks are off the table..
The last issue for the business of Investing, has to with SEC disclosures...Does anyone recall the DEA issue being in the
latest offerings.
TTYLr.
Hey Milo:
I will counter point your argument, The doctors do not control the manufacturing supply of brand or generics Rxs/importation or warehousing/distribution of these addictive narcotics.
All FDA Approved drug must have a pedigree from there source, which in the case of Narcotics are controlled to a very high degree.
The Warehouse is the distributor to the retailer in the Drug markets, Pharmacies, Hospitals, clinics, MD's.
In Warehousing supply chain logistics these are the only customers who may or may not be misbehavin in drug diversion.
Much easier to monitor than the population
The allocation of (money)at the Warehouse Distribution level is a management function at the highest Senior levels.
Risk management executives use cross functionality in all departments to control risks and maximize profits, these are there tools, and increases in product sales are monitored to enhance revenue and discounts with suppliers ..
Drug addiction to prescribed narcotics as reported by the DEA and HHS are growing 4x the rate of illegal drugs/and death rates are even higher.
With Global manufacturing sources without limits and cross boarder importation of narcotics, drug diversion can be every countries biggest nightmare.
Its like laundering money... If you see my point.
The pharmacist is the last stop before this narcotic gets into the hands of a street Drug dealer or addict and there have been many convictions of these folks along with Dr's who create a drug addicted patient.
That is why CAH quickly settled with the DEA for a 2 years suspension and fine.
The other solution is to set up a legal drug mart for addicts at your local pier.
I agree 100%!!!!
Drug's have caused the death of Creative talent, distroyed Families and is a driver for increases in economic Crimes.
I recently lost a young niece, she was 22yrs old, a honor college student to drug use.
I fully support the Actions of the DEA against Medical professionals and Business that place Money before Ethical Human Behavior.
I dont understand how the Fed passes laws and then leaves the monitoring up to private organizations.
One florida paper stated this Walgreeens distrubution center was the largest supplier of Oxycotin/Oxycodine/Roxy in the state, another said it was the largest supplier on the East Coast.
And not one goverment agency or corporate risk manager noticed.
I recall you saying something stinks... well, I am thinking this was not a unforeseen event.
What are your thoughts..
Federal Agents Move Against Walgreen Facility:
As reported in the WSJ minutes ago, DEA agents have shut down the distributions of Drugs from Walgreen Warehouses in florida.
Federal Agents Move Against Walgreen Facility:
As reported in the WSJ minutes ago, DEA agents have shut down the distributions of Drugs from Walgreen Warehouses in florida.
I see it that way, big.yank.
It makes more sense than just a signed provider contract with a payor.
Insurers, have been paying the bills for a provider network that delivers expensive results with poor outcomes,those days are ending.
More payors are requesting Results that are measured againts costs being reviewed aganist lower cost Rx options(TriCare), they have embraced solutions that cost optimize innovative idea's.
Mail-order Rx's are a example, they have studies for long term maintenance adherence, costs and compliance.
$4.00 co-pay and 10.00 90 day fills are another
Kisoks with controls will be the next area of development.
But, you and I have discussed this already.
Walgreens managers has focused its investment direction not on innovation but on food Deserts needing Sushi, Beer and Wine, and 7-11 style service with a takeout Rx delivery window.
The health Insurance industry is consolidating because payor's are seeking accountabilty in controlling spend, and nothing I had just mention does this.
On the other hand A/B and KKR have been innovators in the Cost optimized delivery of Rx services in many countries.
The reason A/B had not moved into the US market was the entry barrier costs, of which, they have now solved that problem.
I think Walgreens could become a leader in this sector again,
but it will take time and a different mindset to accomplish this, and people with proven skills.
Right now, I am thinking, that the Dividend history is the only thing holding up this price for the Institutional Markets.
I also believe CVS among others will not give up Walgreens Rx patients that easily.
We will see after Septembers earning announcement if the Major stock holders feel the cycling of dollars in lost investment opportunities due to Walgreens past decisions are worth waiting around for.
I know, you will get the best out of your business trip!!!
Stay in Touch..
Big /Yank smart move!!
I see that both GS and JPM have filed there own 242b2 offerings.
In musical Chairs they say when the music stops, someone is left with out a chair.
My quess is, buying a chair is the new banking system's, way out of this Risk and insuring the next dance.
Thank you's have been sent to Ben and his elected friends.
It appears that my CAH financial outlooking is begining to
find its wings, it's to bad for CAH that Walgreens has bought one of the largest Drug wholesalers in the World.
One other thought...about corporate goverance, vs the private sector, it is much more SG&A cost aware, than public Corporations, and it does not tolerate Missteps.
Did you watch the Video, I thought a little color and flavor was needed on this board...I liked the gouls, this is how I see some of the Investment Bankers of today!!!
TaTa!!!
Wags Divdends are they Safe??
According to a CNBC report, foreign investment in the Bric's
will not see growth for some time, with the Expection of China, who is restructing Import revenue to Domestic Consumption revenue.
http://finance.yahoo.com/news/brics-investment-disaster-deutsche-bank-175358699.html
In China's pharmacy sector, this industry has not been embraced by the American Capitialistic idea's.
As has been announced, Ben Bernacky has gone all in... with QE3, as Walgreens Managers have leverage it's assest's into Global markets.
The Global projections are not looking as good as the investments into the Good Old USA, who by the way, pay's more than the rest of the world for their Prescriptions.
Now about the little thing called a Dividend, lets see what the
Walgreens current managers have to say about their forward dividend projections.
Walgreens trading Volume is down, and the Institutions Know how to milk a Cow and when it milk production declines, well any person in business Knows what to do..
Milo: I like your 5Q Thinking.
Thanks:
GLTA!!!
Milo:
The idear of markets being efficent is not that irrational,
With monetary input and time they do stabilize, the problem has always been leverage to cash reserves.
Leveraging an asset undertakes forward risk as the Bank of England, LTCM, and CDO's traders have shown us folks.
As for the Book Runners, the first 3 offferings, I am sure had more buyers than the last two..
Moving the payback out as long as these offerings did, brings in
the question, INFLATION and buyers aversion to risk.
It has been said Helicopter Ben has been printing money with or without QE3 and the Market Makers have benefited from this, yet the US or global economy has not grown into increasing employment numbers or a higher demand in consumer consumtion.
This slowdown puts more financial pressure on States that provide medical services for the Uninsured, to control costs like Rx prescriptions.
So a Book Runner who may be holding these bond, creates a market
as stated in the 424B2 and buys and sells these, as the Economic landscape is being developed...
It is my understanding the Cassino always has the Advantage, even in Monte-Carlo.
I enjoyed your video... and in the Celebation of October, I thought this video might have a flavor that all have enjoyed.
Question Milo:
This is not about you option's math, It has to do with yesterdays sale of Walgreens Bonds.
I noticed that the last two offering, having the longest payback terms and interest rates where larger than the 1 and second offering.
Do you think the 5 Book Runners had to hold some part of these, seeing as there is no current market for these bonds, it might be a interesting S/P play if this is the case.
GLTA!!!
Hey Wickedone
Walgreens has leveraging its assets to offset the failed direction it has undertaken over the Last 3 years.
The only intelligent decision they had made was the Alliance Boots
Merger and perhaps Duane Reade which they over paid for, I have no doubt, they where brought to the Woodshed by the Institutional Community to make this latest decisions. S/P 47** to 28.00..
The Alliance Boots investment will take several years before this
becomes profitable.
I look at it this way, Walgreens did not have a growing revenue stream from there core Rx business, but they did have a huge Cash reserve.
In order to transfer this reserve money into income they purchased D/R and now A/B.
But the much needed addition of Alliance Boots cash flow, was larger than their cash reserves, so they went out and borrowed 3 Billion Dollars and issued 83 million shares around 4 Billion dollars of Investors money. see SEC 424B2 statement,
accounting for A/B assets.
Now they take 1 billion out of cash reserves + 3 billion in borrowed cash that now will be placed into the cash flow statement, through the Alliance Boots Merger Revenue.
These Shenanigans did not grow any new core Rx business, they just leveraged Walgreens assets with more debt.
This leads to my KKR/A/B chainsaw Al's outlook, Looking at the A/B administrative costs vs Walgreens,I see a big Difference.
I also recall the CEO of ESRX stating in a C/C that Medco's customers where presented with and where interested in limited networks proposals to lower Medical costs.
I don't think this impasse has played itself out.
Regards,
Milo:
The 424B2 SEC document supports my conclusions on the A/B merger.
"We have not completed a final valuation analysis necessary to determine the fair market values of all of Alliance Boots’ assets and liabilities or the allocation of our purchase price.... between the investment and the call option".
And also I think big.yank used the plug and play method of looking into the 4Q announcement when he read this filing.
Today news is the 4 book runners sold the debt in 5 offerings at various interest rates on years outstanding, the last 2 being the most interesting to this investor, also a new member joined club 35 today, although a loss was noted at closing of .10 a share.
A $10,000 loss.
GLTA!!!
Joni Mitchell got it right!!
Enjoy the music:
Milo at a 31.00 cost basis you are doing very well, and I would like to be in that position.
Perhaps, you will share some of the Knowledge you have about option trading as we share the knowledge of this sectors outlook and Strategy on price movement.
As for your view of Walgreens CEO making this move into the A/B purchase, I believe, with the 100% Walgreen's rapid board approval this was not of his Choosing, the bridge loan agreement is a Clear sign that A/B financing was not in place at the public announcement. see SEC 424B2 filing.
KKR/Pessina's credit rating improved with the announcement while Walgreen's was downgraded, and the borrowing restrictions that Walgreen's is now committing too(SEC 424B2)gives a financial Advantage to KKR/Alliance Boots expansion plans.
Walgreens does not own Alliance Boots with this announcement...also 3 years is a very long time for KKR/Pessina to move into the US market with their business Model. Ref. B/Y review of A/B
Walgreens to date has Failed to break out of its high(ESRX announcement) and only has September's earning to announce, which combined with the last 3Q are distastful at best.
The flu season I think will be slow, as air travel is down also
gas prices are high. I believe there is a correlation to travel and certain types of infections.
US job creation outlook is bleak, election up in the air, and the Euro CMF( see Jim Rodgers video) has not stabilized the Euro.
These are not good indicators for the quik fix that Walgreens is seeking.
Walgreens major revenue source is based on RX income and the consumer products offered compete with many lower cost retail providers. And sticky-ness is the buzz word Retail Rx competitors have now embraced.
As Wag's August sale numbers where announced consumer traffic was down,
That's my view...
Now about that B/S question.. are you familiar with it???
Regards.
A Study in Failure:
TriCare announced to its 10 Million Health Insured members they will NOT be using Walgreens as a preferred Pharmacy provider after the Esrx Settlement was announced last month.
Express Scripts(Esrx) merged with Medco's PBM earlier this year
and was asked to comment on the Tricare announcement.
The CEO stated that it is up to the Health Insurance payor, if they wanted to included Walgreens in their Rx benefit package.
Several larger Employers are adjusting there increasing medical expenses by offering a LIMITED network of Pharmacy providers at a lower cost to their members.
When Esrx was ask if more Companies would Not be including Walgreens as a provider, the response was.. is up to our Clients to make that decision.
This small exchange of information is about to reset Walgreens earnings and possibly change Walgreens projected growth.
Esrx/Medco is NOW allowing its Clients to decide if a Rx provider is costing its members more money than the average retail Rx provider in the network.
This Financial accounting of a retail Pharmacy costs.. to a health plan was the factor in Tricares decision.
"TriCare had 1.38 million members fill their prescriptions thru a lower cost mail-order Rx services in March of 2012". this was reported by TriCare Services..
Walgreens failure in understanding Accountability of its service
cost to Health Insured Networks.. will see other plans dropping its Rx services over escalating costs, these payments are now being monitored by PBM'S and presented to Payor's.
big.yank you hit that out of the ball park when you said cost optimized pharmacy services is the direction.
GLTA!!!
Hey Milo:
I'm looking at 32.** as my first entry point, if it goes lower, I set a second buyin of 500 shares.
I have to agree with Yank about this managements risk profile,
They seem to enjoy gambling with other folks money while not bearing any of the costs from there own pockets.
I would think that Pessina and KKR would be concerned at how Walgreens managers views the coming commoditizations of Drugs.
It is a fact that Rx's are much to expensive in the US with the huge wave of Debt in Healthcare costs, and generic drugs are very cheap.
The TriCare News shocked me also, and the fact the Walgreens failed to mention the new terms of the ESRX contract, solidifies my postion on Managements advoidance to accept reformed pricing levels.
Pessina, I believe has a long term plan that will clash with the Current managers approach in neogiating with large payors...
I put the change of management more like 56% as opposed to yanks outlook.
What the instutional funds will do after the Septembers release, I think they will be risk adverse from the TriCare news annoucement with the forward based projections.
\
Question do you use the Black -Scholes model with options???
Regards,