Boost Driven by Medicare Drug Plan, Sales of Generics
 

:mfr_wha: Isn't it nice to know that those of us using Medicare Part D have been so kind to the Pharmacy industry!! :Doh:


Walgreen's Profit Climbs 25%
Boost Driven by Medicare Drug Plan, Sales of Generics

By Josh Fineman
Bloomberg News
Saturday, December 23, 2006; Page D02
http://www.washingtonpost.com/wp-dyn...122201321.html

Walgreen, the largest U.S. drugstore retailer, said yesterday that profit rose 25 percent as the government's new Medicare drug plan and generic medicines boosted sales.

Fiscal first-quarter profit climbed to a record $431.7 million, beating the average estimate of 15 analysts surveyed by Bloomberg. Profit was $345.6 million a year earlier, Walgreen said in a statement.

Revenue for the three months ended Nov. 30 jumped 17 percent, to $12.71 billion, the biggest increase in three years, as the Medicare plan that began in January attracted senior citizens. More profitable generic versions of best-selling medicines such as the Zocor cholesterol treatment have boosted sales at Deerfield, Ill.-based Walgreen and competitors, including CVS.

"Medicare is driving prescription sales higher," said Don Gher, chief investment officer at Coldstream Capital Management in Bellevue, Wash., with more than $1 billion in assets including Walgreen shares.

Shares of Walgreen closed 72 cents, or 1.6 percent, higher at $46.68 yesterday. The stock has climbed 5.5 percent this year, compared with an 18 percent increase for CVS, the second-biggest U.S. drugstore chain, and a 61 percent rise for Rite Aid, the third largest.

Walgreen, CVS and Rite Aid have faced increased competition from Wal-Mart since September, when the world's largest retailer announced it would offer a month's supply of some generic prescriptions for $4.

"While the last several months have brought plenty of speculation about the effects of $4 generic drugs and industry acquisitions, we've shown with these results what our core drugstore business is capable of doing," Rick Hans, Walgreen's director of finance, said in a pre-recorded conference call.

"We'll never lack strong competitors, new retail concepts and more regulation. But we've thrived despite those issues, and we feel more confident about our future than ever before," he said.