IMPLICATIONS OF $CVS (CVS CAREMARK) LOSS OF PBM CONTRACTS
$CVS on earnings conference call this morning highlighted that $CVS expects $4.5Billion in PBM contract losses. Big customer losses are Chrysler, State of NJ, and Coventry. Further, the company expects $1.7Billion loss from Medicare Part D.
There are significant implications here presenting themselves to long term investors.
Clearly $MHS (Medco Health) and $ESRX (Express Scripts) are taking share away from $CVS. The perception in the market place is that scripts costs more from a retail/mail PBM model. Theoretically retail/PBM model of $CVS should offer competitive advantage over pure mail PBM model of $ESRX and $MHS. Our ZYX Change Analysis validates the theoretical advantage.… Please click here or the title below to read more.
November 5, 2009