Walgreens said to consider sale of PBM
NEW YORK Walgreens is mulling the sale of its 15-year-old Walgreens Health Initiatives pharmacy benefit management division, Bloomberg news service reported Monday.
Walgreens is neither confirming nor denying the report. Company spokesman Robert Elfinger said the company “[would] not comment on rumors or speculation.”
WHI and its mail-order pharmacy component generate in excess of $1 billion in annual revenues and fill or process more than 100 million prescriptions, and Bloomberg cited sources who estimated a sale of the PBM could fetch $500 million to $1 billion, depending on what assets are included in the deal. Among the PBMs that have expressed interest in WHI, according to Bloomberg, are the industry’s top three players: CVS Caremark, Medco Health Solutions and Express Scripts.
In one sense, the sale of Walgreens Health Initiatives would simplify the company’s business model and eliminate a somewhat schizophrenic approach to the pharmacy market. The reason: Even as it has marketed its PBM and mail services, Walgreens also has competed hard against mail-order pharmacy, and taken a firm stand against other PBMs when they instituted policies mandating that their members use mail order exclusively for maintenance medication refills.
What’s more, WHI gradually has been eclipsed in the company’s hierarchy of priorities by a massive effort to develop and integrate all the company’s “points of care,” and take those services directly to employers, health plans and patients. Its health service arsenal now includes nearly 7,562 drug store pharmacies; its Take Care Health Systems subsidiary, which manages some 400 worksite health centers as part of the Walgreens Complete Care and Wellbeing health service network, along with some 350 Take Care in-store, convenient-care clinics; its fast-growing specialty pharmacy and home-infusion business; and its roughly 100 hospital and professional pharmacies.
In a 2009 interview with Drug Store News, Walgreens president and CEO Greg Wasson gave a hint about the diminishing strategic importance of WHI as the company shifted its focus to providing a wide menu of health services directly to employers and health insurance plans. “The neat thing about … our employer solutions model is that large employers and managed care organizations are interested in working with us because they see us as a provider of services they can work with, and pharmacy benefit managers look to us, too,” he said at the time. “We don’t have to be the PBM.”
Pfizer reports 3Q profit rise, revenue drop
NEW YORK Job cuts helped raise Pfizer’s third-quarter 2009 profits by 26% over third-quarter 2008, even though the company had lower overall sales, according to an earnings report released Tuesday.
The world’s largest drug maker reported profits of $2.9 billion, compared with $2.3 billion a year ago, though revenues were $11.6 billion, a 3% decrease from $12 billion in third-quarter 2008. The company said the decrease in revenues and the rise in the value of the dollar kept profits from increasing further.
Pfizer’s $68 billion acquisition of Wyeth, while giving the company a leg up in vaccines, biologics and OTC drugs, helped offset profits by requiring it to pay higher interest rates on its bonds, according to the report. The company incurred $22.5 billion in debt through the acquisition, prompting Standard & Poor’s to lower its bond rating from AAA to AA.
Such drugs as the pain drug Lyrica (pregabalin) and the cholesterol-lowering drug Lipitor (atorvastatin calcium) had strong sales overseas, but primary-care drugs in general had a mediocre performance thanks to lower sales of Lipitor in the United States. Cancer drugs, likewise, had lackluster performance, despite growth in recent years in the cancer drug market in general.
Though the drug Sutent (sunitinib malate) sold well, the company lost market exclusivity in Europe for the drug Camptosar (irinotecan), and had lower sales overseas due to the strengthening of the dollar, helping to drive sales down from $389 million in third-quarter 2008 to $371 million this quarter.
Meanwhile, sales of specialty drugs — drugs prescribed by specialist doctors rather than primary-care physicians — were $1.6 billion, a 3% increase over third-quarter 2008, thanks largely to strong sales of such drugs as the multiple sclerosis treatment Rebif (interferon beta-1a) and the pulmonary arterial hypertension drug Revatio (sildenafil citrate).
“The completion of the Wyeth acquisition represents a significant milestone in the transformation of Pfizer,” Pfizer CEO Jeffrey Kindler stated. “We are beginning to implement our integration plan in order to quickly maximize the value of our expanded and more diversified global product portfolio in key high-growth areas. With customer-centric businesses, supported by research organizations, Pfizer is now well positioned to deliver greater value to patients and shareholders.”
Report: Union, Mo., passes new PSE legislation
NEW YORK There is a big danger here, and it’s a danger that has less to do with the neighborhood meth addict in search of pseudoephedrine, and more to do with appropriate access to medicines and who gets to be the gatekeeper to that access. Because not only will a prescription-only PSE restrict consumer access to a legitimate nonprescription cough-cold ingredient, but if successfully mandated by the local government, it also has the potential to limit legitimate access to just about any cost-saving OTC medicine and for just about any reason.
And that’s because you’ve just usurped the ability to switch or reverse-switch a drug from the scientists employed by the Food and Drug Administration, scientists who vet each decision through clinical trials, and placed that ability into the hands of a local politician, who’s sole clinical experience with any given drug may be that he used it one afternoon because he felt under the weather. Or that his niece experienced an adverse event from overdosing on an OTC cough-cold medicine that she shouldn’t have had access to in the first place.
There are some areas that are appropriately left to local municipalities to govern. This isn’t one of those areas, especially since the industry has offered to supplement the cost of a measure that would both cut down on the use of store-bought PSE in the manufacture of meth while at the same time maintaining access of the decongestant to legitimate users.