Curmudgeon's Corner
cur-mud-geon: anyone who hates hypocrisy and pretense and has the temerity to say so; anyone with the habit of pointing out unpleasant facts in an engaging and humorous manner
Two Battles Settled
Two battles have been settled. One is a purely local battle and the other is a national battle:
On the local scene, Channel 12 is back on the Time Warner (Road Runner) cable system after a relatively short time period. WISN has been running advertisements trying to make Time Warner feel the ‘hurt’, but I suspect that this settlement favored Time Warner more than it favored WISN. WISN, in my opinion, held the far weaker hand in this fight given its weak network affiliation delivering few shows of significance at the moment. Also, WISN was dropping in ratings for its news shows and that was going to smart if it continued much longer.
On the national scene, Walgreen’s pharmacies are scheduled to be back in the Express Scripts pharmacy network effective September 15th. Express Scripts had called Walgreen’s bluff and simply said it wasn’t going to budge from its pricing proposal. Walgreen’s had held fast to its position that it would rather not see all those customers since it wasn’t a money-maker for the chain.
Shortly after this decision, Express Scripts became an even bigger PBM (pharmacy benefit manager) through its acquisition of the Medco Health Solutions PBM that closed in the second quarter this year. That had the effect of doubling the impact on Walgreen’s of its decision to sit out rather than to accept the Express Scripts deal. The revenue hit to Walgreen’s was significant even though it may not have had a big impact on profitability. The CVS pharmacy chain also picked up volume as Walgreen’s customers switched to CVS when the Express Scripts deal happened.
It will be interesting to see how rapidly Walgreen’s recaptures the lost customer flow now that those customers have made moves to other drug stores. If those customers have been happy with their newfound pharmacies, Walgreen’s could continue to suffer.
The smart money suggests that Walgreen’s finally rolled over and decided to end its boycott of Express Scripts. Express Scripts seemed to have come out on the upper end of this deal.
As I mentioned in an earlier blog on this split, the small locally owned drug stores are the ones that really suffer given the clout of the PBMs in this country and the ratcheting down of monies paid for dispensing drugs. The old saying that ‘when the elephants dance, the mice get squashed’ holds true in this dance, as well.
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