My decision to sell was based on reaction to the inversion debate and a personal conviction that the Walgreens brand would be tarnished by even their willingness to consider such a move when something like 1/3 of its revenue is driven by business with the U.S. government. The whole issue was very poorly handled by everyone involved and seemed to me to change the focus on the A-B/WAG combination away from globalized growth and synergies to one of non-operational financial statement management. Plus I had alternative investments that grabbed my interest.
I have stated for years that the underlying driver of healthcare spend and longterm reimbursement trends is CMS. I follow CMS very closely because unlike Congressional actions which are political and drag on forever in constant flux from changes in the balance of power, CMS is run by non-political staffers that have a consistent mission to drive value from the plethora of government healthcare programs. These guys are good. And trust me, they have very long memories. The WAG inversion discussion will linger in many bureaucratic minds, even though the eventual choice was not to re-domicile. Alternatively, Senator Durbin who led the congressional assault on WAG's possible inversion has moved on to his next area for conquest while the CMS team remains in practical control over issues like "how much sympathy do we have for pharmacy reimbursement pressures vs. hospital and clinical reimbursement pressures."
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