Walgreens tricked their interns?

[Pharmpills]

Advertisement - Members don't see this ad

So it appears to me that Walgreens has possibly tricked their 2012 graduating interns in anticipation of Express Script fall out.

In my strong opinion i think Walgreens knew of the impact of Express Scripts to their business and wanted to prevent hiring of interns because their goal now is to cut staff and reduce labor cost which makes no sense because rx volume continues to climb and they will get left behind. It's amazing that companies that continue to make billions in profit somehow feel they must do whatever it takes to make more in profit. Just look at wal-mart they make billions in profit but can't hire enough minimum wage cashiers to help customers get out of the store fast.

 

[KARM12]

Why does this surprise you?

Walgreens is a business. Their goal is to make money. They obviously anticipated that the Express Scripts contract negotiation was going to have an impact on prescription volume... Why would they hire a lot of new pharmacists it they thought they couldn't sustain it?

 

[Ackj]

Why does this surprise you?

Walgreens is a business. Their goal is to make money. They obviously anticipated that the Express Scripts contract negotiation was going to have an impact on prescription volume... Why would they hire a lot of new pharmacists it they thought they couldn't sustain it?

But that begs the question, if they knew it would hurt business, why did they not make a deal with Express? You never make a move expecting to lose.

 

[Got Em]

But that begs the question, if they knew it would hurt business, why did they not make a deal with Express? You never make a move expecting to lose.

They had to. If not, then rates will get lower and lower, till we won't even make a profit dispensing drugs. It's like if companies kept trying bringing your salary down, let's say from 130,000, slowly down to do 20,000, what are you going to do? I would basically get a new career before it ever reached the 20,000 mark. That's what Walgreens was thinking.

 

[Pharfalle]

But that begs the question, if they knew it would hurt business, why did they not make a deal with Express? You never make a move expecting to lose.

They are thinking long-term. They obviously expect this to work to their advantage in the end. If they hired you, you wouldn't get any hours.

 

[confettiflyer]

. It's amazing that companies that continue to make billions in profit somehow feel they must do whatever it takes to make more in profit. Just look at wal-mart they make billions in profit but can't hire enough minimum wage cashiers to help customers get out of the store fast.

well that's the point of being a business...to make gobs and gobs of money.

wal-mart doesn't hire more people to get you out...because you're already in the damn store. they'll hire just enough to keep you from abandoning your spot in line.

 

[iFarm]

But that begs the question, if they knew it would hurt business, why did they not make a deal with Express? You never make a move expecting to lose.

How do you know they lost? Why do so many here assume that this was a huge error on wags part? Walgreens may have lost some revenue, but upper management knew exactly how much $$ and how many scripts they were walking away from. Yet they still did it. Why? Because you can't dispense millions of scripts for nothing. Script count isn't everything.

Walgreens will probably end up negotiating with ESI. But if they do, I'm betting that their reimbursement rates will be better than anyone else. And then they'll have a competitive advantage over everyone else for the length of that agreement.

Meanwhile, CVS pharmacists like RxDuped will be filling scripts for next to nothing. It's short-sighted to think this won't catch up with them.

 

[xiphoid2010]

How do you know they lost? Why do so many here assume that this was a huge error on wags part? Walgreens may have lost some revenue, but upper management knew exactly how much $$ and how many scripts they were walking away from. Yet they still did it. Why? Because you can't dispense millions of scripts for nothing. Script count isn't everything.

Walgreens will probably end up negotiating with ESI. But if they do, I'm betting that their reimbursement rates will be better than anyone else. And then they'll have a competitive advantage over everyone else for the length of that agreement.

Meanwhile, CVS pharmacists like RxDuped will be filling scripts for next to nothing. It's short-sighted to think this won't catch up with them.

Right, wait until the end of fiscal year and see whether the profit margin and operating profit went up before judging. Walgreen, as a publicly traded for-profit organization, it's duty is to maximize stock holder value, not giving out jobs.

 

[nafcillin]

Wags is evil

 

[schamj01]

...and so is every other corporation trying to make money for their shareholders. It's the way the system works, like it or not.

 

[confettiflyer]

Walgreen, as a publicly traded for-profit organization, it's duty is to maximize stock holder value, not giving out jobs.

Seriously. People need to understand this. I'd be PISSED as a shareholder if the company I held didn't try to maximize profit. PISSED. Guess what, shareholders vote for management, employees don't. Done and done.

If people want charity, go to freakin' Goodwill.

 

[Ackj]

Right, wait until the end of fiscal year and see whether the profit margin and operating profit went up before judging. Walgreen, as a publicly traded for-profit organization, it's duty is to maximize stock holder value, not giving out jobs.

Well, I'm sure it would increase margins since they're not getting poor reimbursement. But a 10% margin from 100 million rx is more profit than 15% margin from 50 million rx. I'm not a CFO, or any type of financial analyst, so I have no idea which is better.

 

[xiphoid2010]

Well, I'm sure it would increase margins since they're not getting poor reimbursement. But a 10% margin from 100 million rx is more profit than 15% margin from 50 million rx. I'm not a CFO, or any type of financial analyst, so I have no idea which is better.

Hence I said profit margin AND operating profit. You want an increase in profit margin and an increase in overall profit.

Before the split, Walgreen revenue is ~$70 billion, operating expenses ~$65 billion. Operating profit = ~$5 billion, margin = ~7.1%

Say, if getting rid of Express Script means 20% less scripts and 15% less revenue (poor reimbursement rate), mean while if the 20% less script volume allows you to cut pharmacy hours/expenses by 20%...

$59.5 billion revenue - $52 billion operating expenses = $7.5 billion operating profit = 12.6% margin. Cha ching!

Of course this is greatly simplified hypothetical scenario.

 

[Ackj]

Hence I said profit margin AND operating profit. You want an increase in profit margin and an increase in overall profit.

Before the split, Walgreen revenue is ~$70 billion, operating expenses ~$65 billion. Operating profit = ~$5 billion, margin = ~7.1%

Say, if getting rid of Express Script means 20% less scripts and 15% less revenue (poor reimbursement rate), mean while if the 20% less script volume allows you to cut pharmacy hours/expenses by 20%...

$59.5 billion revenue - $52 billion operating expenses = $7.5 billion operating profit = 12.6% margin. Cha ching!

Of course this is greatly simplified hypothetical scenario.

Yeah, the margin is certain to increase, but the real question is will the profit? Seems too soon to tell just yet. Just how bad was the reimbursement from Express Scripts? Was it really insanely worse than any other plan? That would be a big factor into all of this. It's not like all other plans were giving you 150% of the acquisition cost while Express Scripts was offering 105%.

 

[MountainPharmD]

So it appears to me that Walgreens has possibly tricked their 2012 graduating interns in anticipation of Express Script fall out. Here's why i think so:
1) They changed the way suddenly how they disperse the last year scholarship money by REQUIRING interns to accept a position before they get that $3000 in cash. They prob. knew that they did not want to shell out so much money when an offer probably wasn't going to go out.
2) They changed the date grad job offers go out to late January which is after the time frame their contract with express scripts will end.
3) They initiated a hiring freeze right before graduate pharmacist offers go out in January thus preventing any job offers to interns from going out.

In my strong opinion i think Walgreens knew of the impact of Express Scripts to their business and wanted to prevent hiring of interns because their goal now is to cut staff and reduce labor cost which makes no sense because rx volume continues to climb and they will get left behind. It's amazing that companies that continue to make billions in profit somehow feel they must do whatever it takes to make more in profit. Just look at wal-mart they make billions in profit but can't hire enough minimum wage cashiers to help customers get out of the store fast.

The sky is blue, the grass is green and the sun rises in the east....any more new and breaking info you want to share?

 

[StevePerry]

Seriously. People need to understand this. I'd be PISSED as a shareholder if the company I held didn't try to maximize profit. PISSED. Guess what, shareholders vote for management, employees don't. Done and done.

If people want charity, go to freakin' Goodwill.

Warms my heart to hear this kind of talk. This board just had a Gordan Gekko moment right there...

Walgreens can still suck my ---- though

 

[BidingMyTime]

...and so is every other corporation trying to make money for their shareholders. It's the way the system works, like it or not.

And from a legal standpoint, the law requires that for-profit corporations maximize profits for their stockholders.

I think its too soon to tell if Wags or ESI is going to come out as the final winner.

 

[confettiflyer]

Warms my heart to hear this kind of talk. This board just had a Gordan Gekko moment right there...

Walgreens can still suck my ---- though

Yeah I know, I don't like wags either...I just hate when our resident board hippies expect companies to do this and do that. It's like, hello, come back to reality...even precious google and apple maximize profits, they just do a better job of looking cool (ok google not so much lately).

 

[PharmDstudent]

Say, if getting rid of Express Script means 20% less scripts and 15% less revenue (poor reimbursement rate), mean while if the 20% less script volume allows you to cut pharmacy hours/expenses by 20%...

$59.5 billion revenue - $52 billion operating expenses = $7.5 billion operating profit = 12.6% margin. Cha ching!

Of course this is greatly simplified hypothetical scenario.

This is exactly along the lines of what I've been thinking lately. That this Express Scripts craziness is all just a ruse to squeeze out more money...

If they dump a "large-scale, low reimburser", then it's like giving away all of the black licorice jelly beans and leaving the rest of the jelly beans for yourself. Who cares if you have fewer jelly beans?... at least you have the best flavors left to pick from, and you won't be able to waste your calories on the yucky ones. 😛

 

[KARM12]

If they dump a "large-scale, low reimburser", then it's like giving away all of the black licorice jelly beans and leaving the rest of the jelly beans for yourself. Who cares if you have fewer jelly beans?... at least you have the best flavors left to pick from, and you won't be able to waste your calories on the yucky ones. 😛

Love the analogy. I hate licorice jelly beans...

 

[Rxnupe]

How do you know they lost? Why do so many here assume that this was a huge error on wags part? Walgreens may have lost some revenue, but upper management knew exactly how much $$ and how many scripts they were walking away from. Yet they still did it. Why? Because you can't dispense millions of scripts for nothing. Script count isn't everything.

Walgreens will probably end up negotiating with ESI. But if they do, I'm betting that their reimbursement rates will be better than anyone else. And then they'll have a competitive advantage over everyone else for the length of that agreement.

Meanwhile, CVS pharmacists like RxDuped will be filling scripts for next to nothing. It's short-sighted to think this won't catch up with them.

You might want to call the local pharmacist who work for WAGS in the DFW area- they are cutting hours back and management is making the Pharmacist come up with ideas to make up for the lost revenue. Also, what d you think is going to happen if express scripts.Medco merger goes through? I also might add that with the lost of ESI WAGS is going to suffer some front end sales loss as well- and finally in Texas as of March 1st, 2012- the State Medicaid are now being run by private Insurance and I know for sure Express Scripts has 2 of those contracts- so if you think WAGs losing ESI is just dirt under the carpet keep dreaming.

 

[BMBiology]

This is exactly along the lines of what I've been thinking lately. That this Express Scripts craziness is all just a ruse to squeeze out more money...

If they dump a "large-scale, low reimburser", then it's like giving away all of the black licorice jelly beans and leaving the rest of the jelly beans for yourself. Who cares if you have fewer jelly beans?... at least you have the best flavors left to pick from, and you won't be able to waste your calories on the yucky ones. 😛

Lets just assume Walgreens doesn't make any money from the Express Scripts contract. What Walgreens just lost is revenue and therefore, it lost its buying power. This, in turn, lowers its profit.

What is Walgreens going to do when Express Script merges with Medco?

 

[Its Z]

Lets just assume Walgreens doesn't make any money from the Express Scripts contract. What Walgreens just lost is revenue and therefore, it lost its buying power. This, in turn, lowers its profit.

What is Walgreens going to do when Express Script merges with Medco?

What does revenue have to do with buying power? Buying power depends on the volume and the decrease in volume due to the ESI break up will hardly affect the buying power of Wags.

And lower revenue doesnt automatically translate to lower profit. By decreasing the low margin revenue from ESI, Wags can potentially increase the net profit by lowering the supply cost tied to low margin ESI volume while maintaining the higher margin business with lower inventory.

Medco merger is whole another topic.

Its too bad other chains didnt join in with Wags.

 

[Its Z]

Evidence is in WAGS financials. 2012 fiscal year 1st quarter sales revenue was 4.7% higher than 2011 yet the net earnings was 4.7% lower. Higher revenue doesnt translate to higher profits. Of course this is before the ESI split. We will see how innovative WAG is in recapturing the lost business.

 

[BMBiology]

Evidence is in WAGS financials. 2012 fiscal year 1st quarter sales revenue was 4.7% higher than 2011 yet the net earnings was 4.7% lower. Higher revenue doesnt translate to higher profits. Of course this is before the ESI split. We will see how innovative WAG is in recapturing the lost business.

I think you mean 4th quarter of 2011 or Jan. It is too early for 1st quarter of 2012. Of course, there are other factors that contribute to profit. One of them is buying power.

 

[Its Z]

I think you mean 4th quarter of 2011 or Jan. It is too early for 1st quarter of 2012. Of course, there are other factors that contribute to profit. One of them is buying power.

Learn the difference between fiscal vs. calendar year first then lets discuss financials.