Express Scripts Strikes Bullish Tone As Selling Season Picks Up
11 Maggio 2012 - 6:42PM
Dow Jones News
NEW YORK (Dow Jones) -- Express Scripts Holding Co. (ESRX)
struck a bullish tone Friday, saying a move to break ties with
Walgreen Co. (WAG) has been well received and touting its position
for the key selling season.
The pharmacy-benefit manager's shares were up 3.6% to $56.29 at
midday Friday, a day after the company reported first-quarter top
line growth above Wall Street's expectations and higher adjusted
claims -- a measure that takes into account monthly prescriptions
filled in retail pharmacies and 90-day fills through Express
Scripts' mail-order business.
Chief Executive George Paz gave the market a hint of how Express
Scripts views the current selling season, a time when PBMs solicit
new business, telling analysts his company's ability to remove
unnecessary health-care costs was a message that had been "very
well received." The selling period lasts until late summer or early
fall.
Paz added Express Scripts was "well positioned" as prescription
count grew last year.
The PBM sector has been tumultuous lately, as Walgreen's
decision to leave Express Scripts' network at the beginning of the
year due to a contract-rate dispute led some customers to transfer
their prescriptions to rival drug-store chains, including CVS
Caremark Corp. (CVS) and Rite Aid Corp. (RAD).
Express Scripts closed on the $29.1 billion purchase of fellow
PBM Medco Health Solutions Inc. in early April. More consolidation
for the industry, which handles drug benefits for health plans and
corporate customers, could be on the horizon as midsized PBM SXC
Health Solutions Corp. (SXCI) recently agreed to buy rival Catalyst
Health Solutions Inc. (CHSI).
Paz said that since Walgreen decided to leave the Express
Scripts network, his company has reached out to clients to tout the
convenience of home delivery. That business saw claims volume and
generic-fill rates jump in the first quarter.
Meanwhile, Walgreen has notched notable same-store sales
declines each month this year as prescriptions filled by the chain
have dropped with the exit of some Express Scripts clients.
Walgreen's shares were down 1.2% to $33.63 in recent trading and
have underperformed the broader market's gain in 2012.
J.P. Morgan analyst Lisa Gill said Express Scripts'
first-quarter results should allay fears surrounding the dispute
with Walgreen, which has gotten a sizable amount of attention in
recent weeks. Gill said prescription volumes came in above the
firm's expectations and showed solid year-over-year growth, despite
concerns in the market that the dispute would lead to account
losses.
Paz said Express Scripts typically aims to retain 95% of its
business, as the company gains and loses clients over the course of
the year. He said as the year unfolds, Express Scripts can better
ascertain how the Medco merger affects client movement and give
better guidance.
"I've personally been in front of many, many of the Medco
clients," said Paz. "I think they're excited about what we have to
offer."
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com
(Jon Kamp contributed to this article.)
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