Walgreen CFO: Better off without Express Scripts
NEW YORK (Reuters) - Walgreen Co <WAG.N> Chief Financial Officer Wade Miquelon said on Thursday that the drugstore chain's decision to end its agreement with pharmacy benefits management (PBM) company Express Scripts Inc <ESRX.O> was not a bargaining tactic but a "principled stand."
Miquelon, speaking at conference hosted by Jefferies broadcast over the internet, said Walgreen ended talks because the companies were "miles apart."
Many analysts surmised it was a negotiating tactic by Walgreen, a notion Miquelon dismissed.
"Under any scenario of what Express Scripts is proposing... it's much better for us to go it alone," Miquelon said.
Walgreen said this week it would stop filling prescriptions for people covered by Express Scripts at the end of 2011 after failing to agree on new contract terms, walking away from a deal worth about $5.3 billion in annual sales, or 7 percent of revenue.
At issue are the discounts Walgreen offers Express Scripts clients. Express Scripts said Walgreen gives its clients lower discounts than other drugstores do and wants it to accept market rates
Miquelon characterized the Express Scripts rates as "really really below standard."
Walgreen shares slid after the announcement on Tuesday. But Miquelon said Walgreen would over time make up for any lost business.
"There are really hundreds of other PBMs and managed care plans that have us, that value us."
Walgreen shares were down 29 cents, or 0.6 percent, to $42.36 in premarket trading.
(Reporting by Phil Wahba, editing by Dave Zimmerman)