regaining customers lost from its contract dispute with Express Scripts (ESRX) is going to be a tough sled… even though Walgreen renewed its relationship with Express Scripts effective two weeks ago.
In June of last year, Walgreen and Express Scripts began a battle over payment issues, which continued through the fall open enrollment season of 2011 and ended Jan. 1 of this year with the two parting ways. That left millions of Americans with Express Scripts drug plans looking for a new pharmacy.
Express Scripts is a pharmacy benefit manager, or PBM, that works as a middleman between drug-makers and employers when it comes to buying drugs. PBMs pay pharmacies to dispense the drugs.
Walgreen said fourth quarter sales fell 5 percent to $17.1 billion. Prescription sales – 63 percent of company sales in the quarter – fell 8.1 percent as the company filled fewer prescriptions thanks largely to the Express Scripts fallout. Walgreen said it filled 188 million prescriptions, or a drop of 6.9 percent.
Walgreen’s got a little too greedy, and got a taste of its own medicine. So now Walgreen’s has to hustle and regain customer loyalty and work with the middleman that funnels the business in their direction, Express Scripts. Otherwise, go poor.
It would never have come to this if things were just like back in the day. When doctors had all the medicines you might need in their black bag of mystery items. No middleman. No pharmacy. No insurance company. No co- pays. Treatment right out of the bag. Just like the doctor ordered.
“The good old days. Cocaine, heroin, opium, morphine…we called that medicine.”
Image courtesy of http://imgur.com/gallery/iQcWk.