Walgreen to split with Express Scripts, reports 30% rise in Q3 profit
Deerfield, Ill. — Walgreen Co. said Tuesday it will terminate a $5.3 billion-per-year relationship with Express Scripts.
Walgreen reported that contract negotiations with Express Scripts have failed, and it will stop participating in the St. Louis company’s prescription plans starting Jan. 1. Express Scripts processes about 90 million prescriptions that will be filled at Walgreen stores in fiscal 2011, which will bring Walgreen about $5.3 billion in revenue.
Express Scripts pays Walgreen to fill each prescription. Walgreen said Express Scripts wanted to cut those payments so they were less than the cost of providing the prescriptions, and said those rates were "unacceptable." Walgreen also said Express Scripts wanted to define contract terms including definitions of name-brand and generic drugs, and transfer of prescription drug plans to different networks.
The announcement has overshadowed news that Walgreen’s profit climbed 30% in its third fiscal quarter to $603 million, from $463 million in the year-ago period.
Revenue climbed to $18.37 billion from $17.2 billion. Analysts expected $18.38 billion.
Guess co-founder and chairman to retire
Los Angeles — Guess announced Monday that its co-founder and chairman Maurice Marciano will retire as chairman in January 2012, at the end of the company’s fiscal year.
Marciano will continue as non-executive chairman of Guess’ board of directors, and the company will retain him for two years as a consultant.
Marciano, who hails from southern France and with his brothers founded Guess in 1981, was CEO and co-CEO from 1993 to 2007.
“I am proud of the work we have done and of the strong management team that we have assembled,” said Marciano in a statement.
GNC president resigns company
Pittsburgh — GNC Holdings announced Monday that its president and chief merchandising and marketing officer Beth Kaplan has resigned the company.
After three-and-a-half years in the position, Kaplan cited a desire to pursue personal interests as reason for the departure. She will also resign as a director of the company.
Joe Fortunato, CEO, will reassume the title of president of GNC.
In related news, Amy B. Lane has joined GNC Holdings’ board of directors, replacing Kaplan.
Lane’s experience includes seats on TJX Cos. and Borders Group boards, as well as 25 years as a Wall Street investment banker.