A historically bad flu season has sent Americansto the doctor in droves -- and given a boost to companies acrossthe health-care business.

Hospitalization rates for flu have reached record levels,according to the Centers for Disease Control and Prevention. Therapid spread of the illness is worrisome, with a higher-than-normalnumber of deaths related to flu and pneumonia, including 53children.

For care providers and other companies all along the pharmaceutical supply chain, it has led tohigher revenue from increasing hospital visitsand drug sales.

Margins for flu treatments, widely available in generic form,are razor thin. But the surge in demand caused by this year’soutbreak has helped improve results at drug distributors such asMcKesson Corp., which move medications from the factory to thepharmacy, and for drug retailers including CVS Health Corp., whichhave seen more consumers pick up prescriptions.

Laboratory companies such as Quest Diagnostics Inc. are alsoreceiving a boost as more sick patients are being sent by theirdoctors for tests and blood work.

The effects are unlikely to ebb soon. More than 7 percentof people in the U.S. who visited a health-care provider during theweek ending Jan. 27 went due to flu-like illness, a weekly levelnot seen since the 2009 swine-flu pandemic. This year’s flu vaccinehas been unusually ineffective, and the season has shownno sign of subsiding.

“Everyone that has a theoretical benefit from the flu is callingit out as it has been a modest tailwind,” said Jefferies LLCanalyst Brian Tanquilut, who expects companies to see an evenbigger benefit in the current quarter.

Fatal flu

Admissions at HCA Healthcare hospitals are up the most since the2014-2015 flu season

For some companies, the flu outbreak is turning what threatenedto be a relatively dismal period on its head.

On Thursday, CVS said its operating profit for the first quarterwill be better than previously projected as it fills moreprescriptions for flu treatments.

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‘Exceptionally strong’

“The exceptionally strong flu season across the country has hada major factor in this improved outlook,” CVS Chief FinancialOfficer David Denton said on a earnings call.

The hospital business, which has been struggling in the face ofcompetition from walk-in clinics and other outpatient treatmentoptions, has also been granted a temporary reprieve from itslonger-term decline by the flu.

HCA Healthcare Inc., the first major U.S.hospital chain to report earnings thisquarter, said its admissions rose 5.5 percent in the period -- themost since the 2014-2015 flu season, another year with a severe fluoutbreak. Executives of the Nashville-based company said that theflu contributed 0.5 percent to total admissions in the quarterending Dec. 31.

Since then, the flu has only spread. The hospitalization rate inthe last week of January was higher than during the same week in2015, according to the CDC.

Tenet Healthcare Corp. and Community Health Systems Inc., twoother major for-profit hospital systems that had been strugglingprior to the flu outbreak, will report quarterly results later thismonth.

Pandemic purchases

A ramped-up response to the outbreak could further spur sales ofvaccines and other flu treatments. On Thursday, New York GovernorAndrew Cuomo told state health officials to provide financialsupport to counties responding to the disease. Laboratory-confirmedflu cases were up 35 percent in the state since last week, withhospitalizations rising 2 percent.

Flu treatments are not a highly profitable product fordistributors, but they still drove a portion of sales for thepharma middlemen. McKesson, based in San Francisco, got a push from“some tailwinds” due to the flu, according to Chief ExecutiveOfficer John Hammergren.

“The flu market has been something that has also benefitedus,” Hammergren said on a conference call earlier this month. “It’san important part of the value proposition both in retail aswell as in the ambulatory or physician office setting.”

Tim Guttman, the chief financial officer of Chesterbrook,Pennsylvania-based drug distributor AmerisourceBergen Corp., said on aconference call that the flu slightly affected the Decemberquarter, and further spurred sales in January.

For pharmaceutical giants like the U.K.’s GlaxoSmithKline Plc and France’sSanofi, vaccine sales have surged. Glaxosaw flu-vaccine sales increase 86 percent in the last quarter,while Sanofi sold 21 percent more flu vaccines last quarter.

“We delivered a strong performance in flu vaccines,”said Olivier Brandicourt, Sanofi’s CEO. “This was driven bypandemic purchases in the U.S.”

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