Tough Negotiations With PBMs Over Generic Drugs Leads To ‘Very Disappointing Quarter’ For Walgreens
The prices that pharmacies like Walgreens pay for generic drugs has been falling, but not as fast as insurers’ reimbursement rates. The shrinking gap between the price Walgreens pays and the amount it receives after dispensing the drug is reducing profit margins, the company says. Other health industry news covers the legal struggles over a popular weedkiller that's been linked to cancer, an innovative approach to cutting costs, and caregiving benefits.
The Associated Press:
Walgreens Lowers 2019 Expectations After 2Q Forecast Miss
Walgreens slashed its 2019 forecast and missed second-quarter expectations with a performance that sent its shares plunging Tuesday and helped knock down the Dow Jones Industrial Average. Company leaders told analysts that challenges they had been expecting like reimbursement cuts and lower price increases for branded drugs hit Walgreens much sooner than they anticipated. (4/2)
Reuters:
Walgreens Cuts 2019 Profit Forecast, Hit By Lower Drug Prices
The drop in shares to a more than five-year low wiped off nearly $8 billion from the market capitalization of the worst performing stock in the Dow Jones Industrial Average this year, and weighed on shares of rival CVS Health Corp and drug wholesalers. Drug retailers like Walgreens and CVS Health have been squeezed by reimbursement pressure as their pharmacies receive less for filing prescriptions coupled with a steep decline in generic drug prices for several years. (4/2)
The Wall Street Journal:
Generic-Drug Trends Squeeze Walgreens Profit
Smaller profit from the sale of generic drugs is squeezing the two biggest U.S. pharmacy chains, with Walgreens Boots Alliance Inc. joining rival CVS Health Corp. in lowering earnings goals for the year. Walgreens cut its forecast on Tuesday after experiencing what the company described as its most difficult quarter since the 2014 merger of Walgreens and Alliance Boots. Its shares fell 13% on Tuesday, while CVS lost 3.8%, extending a slump dating to late February when the drugstore chain lowered its 2019 profit target. (Terlep and Walker, 4/2)
Reuters:
Bayer Board Says Pursuit Of Monsanto Was Done Diligently
Bayer's non-executive board reaffirmed its support for top management's decision to acquire seed maker Monsanto last year, after losing high-profile lawsuits to U.S. plaintiffs who claimed Monsanto's Roundup weedkiller caused their cancer. In documents posted on the company's website on Monday, the non-executive supervisory board said an expert opinion it commissioned from lawfirm Linklaters found that Bayer's management had complied with their duties when acquiring Monsanto for $63 billion last year. (4/2)
Modern Healthcare:
Centura Joins Unique Initiative To Cut Healthcare Costs In Colorado
An ambitious effort to lower healthcare costs is taking shape in Summit County, Colo., and its leaders announced a major step forward Tuesday. Peak Health Alliance, a group of employers and individuals that together represent roughly 6,000 people, has directly negotiated payment rates for services with the area's major health system and the county's only hospital provider, Centura Health. The group will now send that contract to health insurers and solicit bids to see who can create the best plan. (Bannow, 4/2)
Reuters:
To Save Time And Money, Companies Roll Out Caregiving Benefits
When Laura Hirsch of Keller Texas had to find a rehabilitation center to help her father recover from a difficult surgery in September, the caregiving service Cariloop saved her a whole day. A case manager at Cariloop, based in Richardson, Texas, sorted through more than a dozen rehab facility options, then armed Hirsch with the right questions to ask when choosing among the final contenders. (Pinsker, 4/2)
