Walgreens Boots Alliance Inc (WBA)

[Porgie Tirebiter]

Blue Cross/Shield is not a monolithic corporation. It is an association of independent health insurance companies. Some use Express Scripts, some don't.

Those that use Express Scripts as the pharmacy benefits manager are no longer having prescriptions filled by Walgreen's through the Express Scripts service.

While this will impact Walgreen's top line, Walgreen's was actually losing money with each prescription filled through Express Scripts. There was some justification for it because it was thought that it would increase traffic in the stores. But you can't use your core business as a loss leader and hope someone buys a candy bar or pack of batteries walking out the door. So I have no problem with Walgreen's telling them to take a hike.

Express scripts is a greedy middleman which some insurance companies have chosen to to manage their pharmacy benefits program. CVS and Rite-Aid would do well to kick them out as well. They are inflating the cost of health care to the detriment of everyone involved. I wish I had owned ESRX over the last 10 years, and the stock has done well lately. But I think they are heading for a fall. They are not going to be able to maintain their pricing power if pharmacies and insurance companies begin to stand up to them.

I'm accumulating WAG. It's a great buy when the P/E ratio is down around 10 or 11.