Walgreen 3Q sales down 3.3 percent
NEWS-SUN STAFF REPORT June 5, 2012 7:06PM
Updated: July 7, 2012 8:41AM
DEERFIELD — Walgreen Co. continued its sales slide into May, as prescriptions dropped again largely because of its break with pharmacy benefits manager Express Scripts.
The nation’s largest drugstore chain said Tuesday revenue from stores open at least a year fell 5.8 percent last month, but that represented a smaller decrease than it saw in March and April.
Walgreen operated 7,889 drugstores at the end of May, or 175 more than last year. Sales for its fiscal third quarter, which ended May 31, fell 3.3 percent to $17.77 billion.
Deerfield-based Walgreen said pharmacy revenue from stores open at least a year dropped 8.5 percent, as prescriptions fell 7.6 percent compared to May 2011.
Walgreen said prescriptions processed by Express Scripts made up nearly 13 percent of its total in May 2011. Comparable pharmacy store revenue declined in this year’s month due to that and generic drug introductions. Generic drugs are cheaper than brand-name alternatives and tend to depress pharmacy revenue, but improve profitability.
Walgreen has said its sales would fall after its contract with Express Scripts expired at the end of last year. Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other customers. Walgreen used to fill prescriptions for Express Scripts.
St. Louis-based Express Scripts, the nation’s largest PBM, has said it ended the Walgreen contract because the drugstore chain wanted a premium compared to what Express Scripts paid other pharmacies. Walgreen has said it would rather give up the revenue it got from Express Scripts than continue filling unprofitable prescriptions.
Walgreen saw revenue from stores open at least a year fall 6.8 percent in March and 6.4 percent in April. Chief Financial Officer Wade Miquelon said Tuesday in a statement the company’s trend for prescriptions filled has improved since January.
Walgreen also said Monday it extended an agreement to work with another PBM, OptumRx, a subsidiary of insurer UnitedHealth Group Inc.
Express Scripts closed a $29.1 billion deal to buy another PBM, Medco Health Solutions, in April. It is expected Walgreen will likely leave Medco’s network, too.