Tag Archives: Express Scripts

Did This Wall Street Bank Get It Wrong on Health Care?

By Keith Speights, The Motley Fool

Filed under:

Did Morgan Stanley get it wrong on health care? The big investment firm recently published its “20 for 2016” report highlighting stocks that it thinks will perform the best over the next few years. Since health care makes up more than 17% of the gross domestic product of the U.S., you might expect that three or four stocks from the sector would be in this top 20 list. That wasn’t the case. Only one health-care stock made the Morgan Stanley ranking: Gilead Sciences .  

Why weren’t there more health-care companies? The biggest reason is that Morgan Stanley wasn’t trying to balance its stock picks by industry representation. The company stated that its focus was on “sustainability — of competitive advantages, business model, pricing power, cost efficiency, and growth.”

That approach sounds reasonable. And Gilead was a great pick based on those criteria. However, I still suspect that health care was underrepresented. Here are three companies that probably should have made Morgan Stanley‘s list.

If we’re looking for a sustainable business model, pharmacy benefits management, or PBM, stands out as a great one. With the Centers for Medicare and Medicaid Services projecting that annual prescription drug spending will increase nearly 75% by 2021, the demand for services to help control these costs should grow. As the largest PBM in the country, Express Scripts sits in the catbird seat for this flourishing industry.

Express Scripts‘ size gives it several competitive advantages. The company can use its heavy purchasing volume to negotiate better deals with pharmaceutical companies than smaller rivals can. Express Scripts‘ economies of scale allow it to drive down costs, particularly in process-intensive areas such as mail-order drug delivery. The company also benefits significantly from its accumulation of data garnered by processing 29% of retail pharmacy prescriptions. This data allows it to develop more effective programs to control drug costs for its customers.

What about growth? Express Scripts‘ revenue more than doubled over the past year and increased by nearly 50% over the last three years. Granted, much of that growth stemmed from the company’s 2012 acquisition of Medco. However, Express Scripts also grew its bottom line by 4% and 5% over the past year and last three years, respectively, even with the big costs of the Medco deal. Those numbers are better than several of the companies included on Morgan Stanley‘s top 20 list.

Morgan Stanley picked a great biotech with Gilead. However, they omitted another impressive player in the industry — Celgene. When it comes to growth, Celgene actually looks better in several metrics. The company’s revenue jumped nearly 28% over the last three years compared to Gilead’s 11% growth. Celgene’s earnings per share likewise soared by 28% during this period, while Gilead increased earnings per share by 5%.

Celgene’s primary drug, Revlimid, targets multiple myeloma and myelodysplastic syndromes, or MDS, both of which are bone marrow diseases. Revlimid is the top-selling drug for those indications and continues to experience solid …read more
Source: FULL ARTICLE at DailyFinance

Why Express Scripts Is Poised to Outperform

By Brian Pacampara, Pacampara, The Motley Fool

Filed under:

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, pharmacy benefit manager Express Scripts has earned a coveted five-star ranking.

With that in mind, let’s take a closer look at Express Scripts and see what CAPS investors are saying about the stock right now.

Express Scripts facts

Headquarters (founded)

St. Louis (1986)

Market Cap

$48.0 billion

Industry

Healthcare services

Trailing-12-Month Revenue

$93.9 billion

Management

Chairman/CEO George Paz
CFO Jeffrey Hall

Return on Equity (average, past 3 years)

28.7%

Cash/Debt

$2.8 billion / $15.9 billion

Competitors

Aetna
Cigna
Humana

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 840 members who have rated Express Scripts believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, adamlevy, succinctly summed up Express Scripts bull case for our community:

With an aging population that’s becoming more reliant on prescription drugs the entire health care sector is poised to gain.

Additionally, Express Scripts stands to gain from the impending patent-cliffs of several blockbuster drugs in 2013 and 2014.

The company also has its foot in the booming specialty drug treatment market, and the purchase of Medco last year increases its position in cancer treatment, which is one of the fastest growing segments.

Finally, Obamacare will increase the number of insured citizens. While most will be through medicare, one of Express Scripts largest clients, WellPoint, is the biggest medicare-based insurer. This means a flood of new customers for Express Scripts.

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its perfect five-star rating, Express Scripts may not be your top choice.

We’ve found another stock we are incredibly excited about — excited enough to dub it “The Motley Fool’s Top Stock for 2013.” We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won’t be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Express Scripts Is Poised to Outperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Express Scripts and WellPoint. The Motley Fool owns shares of Express Scripts and WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © …read more
Source: FULL ARTICLE at DailyFinance

Rite Aid May Be Headed Downhill Again

By Adam Levine-Weinberg, The Motley Fool

Filed under:

For much of 2012, troubled pharmacy chain Rite Aid seemed to be pulling itself up by its bootstraps. It benefited from a dispute between Walgreen and Express Scripts that forced many former Walgreens patrons to fill their prescriptions elsewhere. Furthermore, the company saw improved sales at stores that it remodeled to a new “wellness” format. In Q3, these sales drivers culminated in Rite Aid‘s first quarterly profit since 2007.

However, Walgreen and Express Scripts finally settled their long-running dispute last summer, and Walgreens stores rejoined the Express Scripts network on Sept. 15. Moreover, at the same time the company rolled out its first loyalty program, called “Balance Rewards”, as part of a push to win customers back from Rite Aid and CVS Caremark . While it’s too early to be sure, it appears that Walgreen’s resurgence is squeezing Rite Aid again. Rite Aid has a heavy debt load of roughly $6 billion and is much smaller than Walgreen and CVS — two major competitive disadvantages. Rite Aid is therefore a very risky investment and should probably be avoided.

Sales momentum tapers off
Rite Aid‘s strong Q3 earnings were the result of 1.1% same-store-sales growth in the front end (non-prescription sales) and a 3.6% increase in prescription count in comparable stores. (Overall, same-store sales decreased 1.5% because of the introduction of new lower-cost generic drugs.) However, performance was strongest early in the quarter, before Walgreen had a chance to win back Express Scripts customers.

Q4’s performance could have been much worse, if not for the bad U.S. flu season. Front-end sales decreased 1% in December while prescription count increased 4.4%, including a 170-basis-point gain from sales of flu shots and flu-related prescriptions. January was even stronger, with the front end up 4.2% (2.4% attributable to flu treatments), and prescription count up 5% (3.4% resulting from flu-related prescriptions). However, Rite Aid‘s momentum dissipated with the end of flu season. With no flu-related tailwind in February, front-end sales dropped by 1.3% and prescription count increased by a meager 0.3 %.

Turnarounds are expensive
Rite Aid once again faces two stronger competitors in Walgreen and CVS. Convenience is a key competitive advantage in the drugstore industry, giving larger chains such as Walgreen and CVS an edge. I’m skeptical that Rite Aid will be able to successfully fend off this competition in light of its fading sales momentum and weak balance sheet. A case in point is the rollout of the “wellness” format stores. While these stores outperform the company average, Rite Aid has been remodeling stores at a rate of only 110 to 120 per quarter. At that rate, it will take roughly a decade to convert all stores to the new format. However, Rite Aid‘s weak balance sheet and limited cash flow make it difficult for the company to invest more aggressively in its stores. Ultimately, Rite Aid‘s weaknesses outweigh its strengths and make it a poor long-term investment candidate compared …read more
Source: FULL ARTICLE at DailyFinance

How Big Pharma Avoids Billions in Taxes

By Brenton Flynn, The Motley Fool

Filed under:

In the following video, Motley Fool health care bureau chief Brenton Flynn discusses a recent Bloomberg article, which highlights the incredible benefits pharmaceutical companies enjoy through tax management strategies. Brenton tells investors who is profiting and by how much, and why other large-cap health care companies like UnitedHealth Group and Express Scripts are missing out.

One of the biggest beneficiaries of a tax management strategy last year was Abbott Labs. For some Abbott Labs shareholders, the new year brought with it a new company called AbbVie. Formerly Abbott‘s branded pharmaceuticals business, shares of the new stock were distributed to investors on Jan. 2. To help investors better understand the situation, The Fool has created a brand new premium report on both stocks. Inside, we outline all of the must-know opportunities and risks facing both companies, so make sure to claim this report by clicking here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Brenton Flynn“, contentId: “cms.22969”, contentTickers: “NYSE:MRK, NYSE:JNJ, NYSE:ABT, NYSE:UNH, NASDAQ:ESRX”, contentTitle: “How Big Pharma Avoids Billions in Taxes”, hasVideo: “True”, pitchId: “84”, pitchTickers: “NYSE:ABT, NYSE:ABBV”, …read more
Source: FULL ARTICLE at DailyFinance

Can Walgreen's Stock Rise 200%?

By Tamara Rutter, The Motley Fool

Filed under:

Shares of Walgreen were all over the map last year. The company’s fallout with pharmacy benefits manager Express Scripts , as well as increased competition from CVS Caremark and Rite Aid , left Walgreen in poor shape in 2012. However, 2013 is shaping up to be a moneymaking year for the country’s largest drugstore chain. Let’s take a closer look at what Walgreen has planned for the year ahead, and what catalysts are needed to push the stock into two-bagger territory.

A brief flashback
There’s no denying that the past few years have been challenging for the drugstore chain. The company’s messy breakup with PBM Express Scripts resulted in billions of lost revenue for Walgreen. In fact, before the dispute, Express Scripts accounted for about $5 billion in annual sales for the pharmacy retailer.

Express Scripts provides a variety of pharmacy services to its clients, including patient care and benefit management care. However, when Walgreen dropped its contract with Express Scripts, it subsequently slammed the door on tens of thousands of customers in the Express network. That’s not all.

Rivals including CVS and Rite Aid jumped at the opportunity to steal customers away from Walgreen. As millions of customers left Walgreen for CVS and Rite Aid, so, too, did investors. However, to its credit, Walgreen ultimately settled the contract dispute with Express Scripts. In July, the two companies agreed on a new multiyear deal.

Just what the doctor ordered
Once Express Scripts welcomed Walgreen back into the family, the company began working every angle to win back lost pharmacy customers. However, it wasn’t until January of this year that Walgreen’s prescription volumes finally showed signs of a turnaround. “January prescription volume increased in the low double digits, which was above analyst expectations and followed months of declining prescription sales comparisons,” Barron’s reported.

This is particularly encouraging because prescription sales make up about two-thirds of Walgreen’s total revenue, although Walgreen is hoping its acquisition of Alliance Boots will help boost future sales at the company. Walgreen coughed up $6.7 billion for a 45% stake in the European drugstore chain last year and will take on billions in debt to fund the cash-and-stock deal. Nevertheless, this decision carries both risks and opportunities for the company.

Global opportunities
True, it isn’t the best time to gain European exposure. However, the deal positions Walgreen for international growth in the years to come — particularly thanks to Alliance Boots‘ position as the largest British drugstore chain, as well as the company’s 3,300 stores across 25 countries. Shareholders will also be glad to know that Alliance Boots‘ executive chairman, Stefano Pessina, predicts double-digit earnings growth in the quarters to come, according to Barron’s.

Meanwhile, Walgreen CEO Greg Wasson said the company’s strategic partnership with Alliance Boots will allow it to establish “an unprecedented and efficient global platform.” “As our two iconic brands come together, we will have a platform that will be very difficult, if …read more
Source: FULL ARTICLE at DailyFinance

Why CVS Caremark Is Poised to Keep Popping

By Brian D. Pacampara, Pacampara, The Motley Fool

Filed under:

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, drugstore and pharmacy benefits giant CVS Caremark has earned a coveted five-star ranking.

With that in mind, let’s take a closer look at CVS Caremark and see what CAPS investors are saying about the stock right now.

CVS Caremark facts

 

 

Headquarters (founded)

Woonsocket, R.I. (1892)

Market Cap

$63.9 billion

Industry

Drug retail

Trailing-12-Month Revenue

$123.1 billion

Management

CEO Larry Merlo (since 2011)

CFO David Denton (since 2010)

Return on Equity (average, past 3 years)

9.6%

Cash/Debt

$1.4 billion/$9.8 billion

Dividend Yield

1.7%

Competitors

Express Scripts Holding

Walgreen

Wal-Mart Stores

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 1,769 members who have rated CVS Caremark believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, ValueInvestor747, tapped CVS Caremark as a particularly solid income opportunity:

Not my traditional investment as I’m relying on more growth than anything, but still pays a decent dividend and valuation is OK. They have impressed me with [year-over-year] revenue growth and with the baby boomers continuing to age, I see huge growth. It may take a few years, but I have time.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, CVS Caremark may not be your top choice.

We’ve found another stock we are incredibly excited about — excited enough to dub it “The Motley Fool’s Top Stock for 2013.” We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won’t be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why CVS Caremark Is Poised to Keep Popping originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
…read more
Source: FULL ARTICLE at DailyFinance

Report: U.S. Spending on Traditional Prescription Drugs Fell in 2012

By Dan Carroll, The Motley Fool

Filed under:

A report from pharmacy benefit management company Express Scripts released today shows that in 2012, American spending on traditional prescription medications, such as pills for high blood pressure and similar common ailments, declined. The 1.5% decrease among insured Americans was the first fall in such spending in more than 20 years.

However, while spending on traditional prescriptions fell, spending on specialty medications — such as therapies for rheumatoid arthritis, hepatitis C, and cancer — grew by 18.4% among the insured population. That offset the fall in traditional prescriptions and helped send total prescription drug spending up by 2.7% in 2012, similar to 2011’s total growth rate, according to the report.

Dr. Glen Stettin, Express Scripts‘ senior vice president of clinical, research and new solutions, was quoted in the press release as saying, “The first-ever decrease in traditional drug spending is the latest chapter of an ongoing success story for our utilization management programs and for an increased interest in generic medications, home delivery pharmacy and more focused retail pharmacy networks.”

Among traditional prescription drugs, diabetes prescription therapy spending rose 11% in 2012. That marks the second consecutive year in which the country spent more on prescription drugs for diabetes than for any other therapy class, according to Express  Scripts, which noted unit cost increases for popular insulins.

Attention disorder therapies saw growth of more than 14%. Among all drugs, hepatitis C medications saw the highest spending hike, growing by 33.7% last year.

link

The article Report: U.S. Spending on Traditional Prescription Drugs Fell in 2012 originally appeared on Fool.com.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, …read more
Source: FULL ARTICLE at DailyFinance

Walgreens February Sales Decrease 2.2 Percent

By Business Wirevia The Motley Fool

Filed under:

Walgreens February Sales Decrease 2.2 Percent

Excluding 2012 leap day, February sales increase 1.5 percent

DEERFIELD, Ill.–(BUSINESS WIRE)– Walgreens (NYS: WAG) (NAS: WAG) had February sales of $5.75 billion, a decrease of 2.2 percent from $5.88 billion for the same month in fiscal 2012. Last year’s total February sales benefited from one extra day because of the leap year. Excluding last February’s leap day, this year’s February sales increased 1.5 percent. Total front-end sales decreased 3.1 percent compared with the same month in fiscal 2012, and were flat when excluding last February’s leap day. All comparable store sales and comparable prescription figures below compare the first 28 days in February 2012 to the 28 days in February 2013.

Comparable store front-end sales decreased 1.4 percent, while customer traffic in comparable stores decreased 4.9 percent and basket size increased 3.5 percent.

Prescriptions filled at comparable stores increased by 6.5 percent in February. Prescriptions filled at comparable stores were positively impacted by 0.1 percentage point due to the higher incidence of flu in this year’s February. Flu shots had no impact on comparable store sales. The company said the percentage of former Express Scripts customers returning to its pharmacies continued to increase in February on a flu-adjusted basis.

February pharmacy sales decreased by 2.1 percent, but increased 2.0 percent when excluding last February’s leap day. Comparable store pharmacy sales were flat and were negatively impacted by 6.0 percentage points due to generic drug introductions in the last 12 months. Pharmacy sales accounted for 61.9 percent of total sales for the month.

Flu shots administered at pharmacies and clinics season-to-date were nearly 7.0 million versus 5.5 million last year.

Sales in comparable stores decreased by 0.6 percent in February. Generic drug introductions in the last 12 months negatively impacted total comparable sales by 3.7 percentage points.

Registrations for Walgreens Balance® Rewards loyalty program, which launched in September, totaled nearly 60 million through February.

Total sales for the second quarter of fiscal 2013 were $18.63 billion, down 0.1 percent from $18.65 billion in the second quarter of fiscal 2012. Fiscal 2013 year-to-date sales for the first six months were $35.95 billion, down 2.3 percent from $36.81 billion in the first six months of fiscal 2012.

Calendar year-to-date …read more
Source: FULL ARTICLE at DailyFinance