Santarus applies for approval of ulcerative colitis drug
SAN DIEGO — Drug maker Santarus has submitted a new drug application with the Food and Drug Administration for a treatment for ulcerative colitis, the company said.
The application was for Uceris (budesonide) tablets in the 9-mg strength for moderate active UC. The company is developing the drug under a collaboration with Cosmo Technologies.
Walgreens steadfast in its resolve to move on without Express Scripts
DEERFIELD, Ill. — As Walgreens girds itself for life outside of the Express Scripts pharmacy network, company executives, over the course of a Wednesday morning first-quarter conference call, continued to maintain that they, along with healthcare payers and employers, will be better off for it.
Walgreens noted the chain made a final effort to reconcile with Express Scripts one week ago, and the offer that came back was still untenable, Walgreens president and CEO Greg Wasson reported during the first-quarter conference call. "[Express Scripts] suggested to kick the can down the road past Jan. 1," Wasson said. "[But] we’re always open; we’re in the business of filling scripts," he added, suggesting a deal in the final hour still was possible, though not likely.
In large part because of the Express Scripts dispute, Walgreens stock was trading down by $1.90 per share in mid-morning trading to $31.60 per share. Analysts projected that Walgreens stock will continue to be depressed in the near term. Net earnings per diluted share for the quarter increased 1.6% to 63 cents, 4 cents shy of analysts’ estimates. Walgreens reported that, compared with the prior-year’s quarter, the delay in the cough, cold and flu season impacted net earnings per diluted share by 1 cent, while the battle with Express Scripts cost the chain an additional 1 cent per diluted share in comparable pharmacy sales and 1 cent per diluted share in related expenses.
"It’s really [only] a matter of time before people find an option to get what they want [which is Walgreens in their network]," Wasson added. And Walgreens is counting on it. Jan. 1 will be the worst day in a post-Express-Scripts world. From there, Walgreens will be looking to reconnect with any lost payers or employers and are confident they will be able to recapture much of that lost business. The only question is how soon.
Walgreens already has retained some 10 million prescriptions from the Express Scripts base, representing 11.4% of the total Express Scripts prescription base. If Walgreens can retain at least 50% of the 8 million Medicare Part D prescriptions and at least 25% of the 30 million prescriptions represented by all payers not Wellpoint or Tricare, then Walgreens will have retailed 25% of the Express Scripts business, or 22 million prescriptions out of 88 million. If the 25 million Wellpoint prescriptions would return to Walgrens, that would mean 53% of prescriptions were retained. And if Tricare’s 15 million prescriptions were to come back, too, that would mean 70% of prescriptions were retained.
"We expect to achieve 97% to 99% of our fiscal 2011 prescription volume in fiscal 2012," Wasson told analysts Wednesday morning, even without serving Tricare or Wellpoint patients any longer. At the low end, that projection would place Walgreens at 794 million prescriptions dispensed in fiscal 2012. But considering two strong tailwinds that will help grow the overall prescription base as well as the profitability of that base; namely, an aging population and the generic wave, Walgreens may yet match, if not exceed, its 819 million prescriptions dispensed in fiscal 2011.
"To date, well over 100 health plans, employers and other Express Scripts clients have informed Walgreens that they have either changed pharmacy benefit managers or taken steps consistent with their contracts to maintain access to Walgreen pharmacies in 2012," Wasson noted. "In addition, we’re in active negotiations with many health plans and employers to provide access to Walgreens and their networks as soon as their contracts allow."
Half of Express Scripts’ employers have options to contract with Walgreens directly, Wasson said. "Many, as we’ve said, [have been] waiting toward the end to see if we [Express Scripts and Walgreens] would settle."
To help further envisage the value of Walgreens pharmacy to a PBM network, Walgreens posted a second white paper. Citing a survey in that white paper, Wasson said, "More than 80% of employers said they would not exclude Walgreens from their network for less than 5% savings on their total pharmacy spend; 60% of employers said they would not exclude Walgreens for less than 10% savings; and 21% said they would not exclude Walgreens from a network regardless of the savings."
While the Express Scripts issue dominated Walgreens’s first-quarter call Wednesday morning with Walgreens’ exodus from Express Scripts’ network imminent, Wasson also highlighted several recent achievements Walgreens had accomplished in the past year as the Chicago pharmacy operator prepares for the grand opening of its Chicagoland State and Randolph store in early January and host the chain’s annual shareholder meeting Jan. 11.
Wasson reported Walgreens dispensed a record 208 million prescriptions for a first quarter. The chain also realized a 37% year-over-year growth in 90-day prescriptions. Citing IMS Health data, Walgreens’ 30-day prescription marketshare was 19.9%, up 40 basis points from a year ago.
Walgreens’ vaccination program still is going strong, Wasson said. Even though Walgreens administered 600,000 fewer flu shots through Nov. 30 as compared with last year, with 5 million patients inoculated with this year’s triumvirate influenza vaccine, Walgreens still is the largest dispenser of flu shots outside of the U.S. government.
And Walgreens’ efforts are being recognized by the U.S. government — First Lady Michelle Obama visited Walgreens earlier this year to applaud the chain’s efforts in growing its fresh food offerings and it commitment to expanding food desert locations. And Department of Health and Human Services Secretary Kathleen Sebelius this year received her flu shot from a Chicago Walgreens.
Walgreens reported net earnings of $554 million fir the first quarter ended Nov. 30, a 4.5% decline from the same period a year ago.
Total gross profit dollars increased $159 million, or 3.2%, compared with the year-ago quarter, with gross profit margins decreasing 40 basis points, versus the year-ago quarter to 28.1 as a percentage of sales. The decline was driven by tightening retail pharmacy margins because of lower reimbursement rates. Front-end margins remained steady, Walgreens reported. The company expects an increase in gross profit growth from new generic drug introductions, including generic Lipitor, during the second half of the fiscal year compared with what was seen in the first quarter.
First quarter sales increased 4.7% from the prior-year quarter to $18.2 billion. Total sales in comparable stores increased 2.5% in the quarter, while front-end comparable store sales increased 2.4%. Customer traffic in comparable stores dropped 0.2% for the first quarter, while basket size increased 2.6%.
Prescription sales, which accounted for 65.5% of sales in the quarter, increased 4.2%, while prescription sales in comparable stores increased 2.6%. The company filled a record 208 million prescriptions in the quarter, an increase of 2.5% over last year’s first quarter. Prescriptions filled in comparable stores increased 1.8% in the quarter. The company exceeded by 230 basis points the prescription growth rate of the rest of the industry during the same period as reported by IMS Health, Walgreens stated in a first-quarter press release.
FDA approves Takeda’s Edarbyclor
DEERFIELD, Ill. — The Food and Drug Administration has approved a new drug for high blood pressure made by Takeda, the drug maker said.
The Japanese drug maker received approval for Edarbyclor (azilsartan medoxomil and chlorthalidone) for the treatment of high blood pressure, also known as hypertension. The company called it the only fixed-dose therapy that combines an angiotensin II receptor blocker with chlorthalidone, a diuretic, in a once-daily, single tablet. The company also markets Edarbi, which only contains azilsartan medoxomil.
"Hypertension is a complex disease that affects one-in-three Americans," Virginia Commonwealth University Medical Center professor Domenic Sica said in a statement on behalf of Takeda. "It is critical to control hypertension because lowering blood pressure has been shown to reduce the risk of serious health consequences, including stroke and heart attack."