big.yank Yes and No..
Yes, CVS has diversified its position with a PBM, something Wickedone and I said was a foolish move for Walgreens to sell.
In our Federal Medicare/Medicaid system the gov't work with a Private Insurance payer System and PBM's are now floaters of this gov't money, I follow the money!!!
Medicare does not issue a check for medical services, it is a contracted Insurance vendor that preforms this service.. That is why the Medicare administration overhead costs are so low.
And these contractors pay $600 dollars for a ingrown toe nail.
Heath Insurers have and will continue to Merge as the ACA develops!!!
Or as the Grace commission reported government spending $10,000 for a toilet seat..
In contrast the Medicaid System was established for Low income workers, who are generally less educated or employable and have nutritional consumption issues, OverWeight and low income levels have been studied,
See Major Bloomberg position on Soda that EBT(food Stamp) pay's for, also Candies, Salty Chips and Junk food, a staple for the Medicaid/EBT Group and Walgreens customer offerings.
There are also MediCaid folks that have a high cost medical condition that wages will not come close to paying for and the aging of the Junk foodies who medical problems are emerging..
These costs have always been shifted to the now diminishing Private insured payer group.
Incomes the long anticipated ACA..
Walgreens is at the low level of the revenue food chain, that's is why flu shots where lobbied into service and a misguided high cost buy into Clinics..
I don't foresee a problem with the CVS renewal contract, as CVS has not excelled in PBM capture rates and Walgreens took a beating under Esrx impasse
The problem Walgreens has going forward is, as you and I have discussed is the Sushi follie and Banking Vault Stores..
They see it as a tourist Anchor and I see it as sinker with Walgreen current Structured model offerings.
Wallstreet, financed A/B into play because of the profit margins made in Nottinghams Beauty growth, however Joe, fingered Wags managers and moved into big screen TV'S.quite a set back..
If Rx's are becoming a commodity as A/B CEO understands Walgreens is moving itself into multi channel offering with no growth projections, only synergy savings.
Reallocating Assets, to deal with Rx cost issues has not been a strong point under the current model..IMHO
GLTA!!
AI
