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Re: Prudent Capitalist post# 591

Thursday, 01/17/2013 4:34:22 PM

Thursday, January 17, 2013 4:34:22 PM

Post# of 3163
WAG vs. CVS... only pertinent if Walgreens fails to complete the 2nd tranch of the Alliance-Boots acquisition.

Walgreens balance sheet remains strong, but CVS remains in fuller control of its cash flow because it heavily influences PBM reimbursements. Be wary of another ESRX-type impasse when the CVS/WAG contract comes up for renewal in this Spring, at least according to my sources.

I do not think CVS wants another war with Walgreens because they actually suffered worse than did Walgreens during a similar confrontation, a few years back. But I do believe Larry Merlo will drive a hard bargain and I doubt that Kermit has the testosterone or career "chips" to call in to risk another ESRX-type battle.

GLTA,

Yank
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