Fitch says more prescriptions filled in 2Q
Prescriptions increased in the second quarter for some of the largest U.S. drugstores and pharmacy benefits managers despite the weak economy, an analyst for Fitch Ratings said Friday.
Analyst Bob Kirby said prescriptions for Medco Health Solutions Inc. and Express Scripts Inc. and for the drugstores Walgreen Co. and CVS Caremark Corp. rose 5.2 percent compared with a year ago. Kirby said he expects similar growth for the rest of the year assuming economic conditions don't change much.
The analyst wrote that prescription trends were better for the pharmacy benefits managers than the drugstores. That's partly because Medco won new clients, and Express Scripts acquired NextRx, which was previously part of WellPoint Inc. Kirby said mail order prescriptions for the two companies grew 13.3 percent.
Pharmacy benefits managers make more money when they can persuade patients to get their 90-day prescriptions delivered by mail instead of picking them up at pharmacies.
Kirby said Walgreen's prescription growth of 5.9 percent far outpaced the 0.1 percent rise at CVS Caremark during the quarter. Combined, the companies filled about 401 million prescriptions, up 2.9 percent from the previous year.
CVS Caremark has both a drugstore component and a drugstore chain business. Prescriptions at CVS stores were weak because Caremark, the company's pharmacy benefits management unit, lost several significant clients at the end of 2009. He said Caremark has done a better job of retaining clients this year, and CVS signed a major new contract with health insurer Aetna Inc.
Walgreen's results got a boost after the company acquired Duane Reade Holdings in early April. Walgreen has more than 7,500 stores, and CVS has about 7,100.