Walgreen Co.'s fiscal second-quarter earnings fell almost 8 percent, knocked down largely by its exit from the Express Scripts pharmacy network, but the drugstore operator still topped analyst expectations, and its shares outperformed broader market indexes Tuesday.
The nation's largest drugstore chain said its split with Express Scripts, a St. Louis-based pharmacy benefits manager, hurt results by about 7 cents per share in the quarter that ended Feb. 29. A mild cold and flu season also affected earnings by about 3 cents per share.
Express Scripts paid Walgreen to fill prescriptions, but the companies let a contract between them expire at the end of last year after months of talks failed to produce a new deal. Pharmacy benefits managers, or PBMs, run prescription drug plans and use large purchasing power to negotiate lower drug prices.
Walgreen processed about 90 million prescriptions for Express Scripts in fiscal 2011, and the drugstore operator retained about 15 percent of that total in its second quarter. Company officials said Tuesday they expect that percentage to rise, as clients like the state of Nebraska switch to health insurance providers that have Walgreen in its network.
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