Analyzing Express Scripts (ESRX) Earnings & Market's Reaction
Posted on September 26, 2008 in Generic prescription drug list
By Yaser Anwar, CSC of Equity Investment Ideas Express Scripts reported accelerating earnings growth while generic penetration jumped 200 basis points. This was completely ignored as the coming changes to the AWP (A national average of list prices charged by wholesalers to pharmacies.) benchmark dominated investors thinking. I think the fears may be a bit too exaggerated. "Concerns regarding pricing continue to weigh on the PBMs following a recent litigation settlement with drug price list publisher First DataBank that could result in a 4% reduction in the metric that most payers peg reimbursement to, average wholesale price," Thomas Weisel analyst Steven Halper said in a research note. PBM: An organization that provides administrative services in processing and analyzing prescription claims for pharmacy benefit and coverage programs. In the quarter, Express Scripts generic penetration rate grew to a record 58.3%, up 200 basis points sequentially and a staggering 380 basis points higher than the prior year. This quicker than expected growth in generic penetration paired with the an increase in mail order provided Express Scripts with a strong EBITDA of $229.5 million, a 27% increase YoY. Amid accelerating earnings, Express Scripts Cheap Generic Viagra
Board News you won't hear about from STRS, OEA, OEA-R or ORTA
Posted on June 26, 2008 in Generic prescription drug list
Will First DataBank Deal Get Settled? From Pharmalot.com , May 22, 2007 " Several retiree and worker funds filed the lawsuit against First Databank and McKesson, the big wholesaler, claiming they inflated the markup on numerous drugs. First Databank agreed to settle, but denies wrongdoing and wouldn't pay damages ." (Imagine that! - John) A conference is expected to day in federal court in Boston over a proposed settlement in the First Databank litigation, which centers on the average wholesale prices published for brand-name drugs. First Databank is a unit of Hearst. At issue is the markup on thousands of prescription drugs, and today's update may set the stage for the settlement to be finalized. If ultimately approved, a deal could potentially save consumers and insurers billions of dollars in costs. Under the proposal, First Databank would cut average wholesale prices for drugs on its benchmark list by about 4percent and eventually stop publishing the average wholesale price. Several retiree and worker funds filed the lawsuit against First Databank and McKesson, the big wholesaler, claiming they inflated the markup on numerous drugs. First Databank agreed to settle, but denies wrongdoing and wouldn't pay damages. McKesson hasn't agreed to settle. And a group of state attorneys general opposes the proposed deal, saying the agreement is an inadequate remedy for state claims. In 2002, First DataBank suddenly raised prices on its AWP list. Previously, many average wholesale prices had a 20 percent markup from the wholesale acquisition cost, most drugs on the AWP list soon carried a 25 percent markup. Further reading... The Wall Street Journal (subscription required); Settlement agreement.