Re: Generic Zocor reduces profits

MarilynMann wrote:

Generic Zocor reduces profits
Walgreens feels pain as drug price drops

By Bruce Japsen | Tribune staff reporter
October 7, 2007

What's good for consumers with high cholesterol proved not to be so
good for the nation's largest drugstore chain last week.

Perhaps the biggest reason Walgreen Co.'s stock tanked came thanks to
profits from generic versions of Zocor, a cholesterol drug used by
millions of Americans to lower LDL, the "bad" cholesterol. Walgreens
shares on Monday fell 15 percent, or $7.08, from the Sept. 28 close,
to $40.16, the biggest drop in 27 years.

The news was hard medicine to take for analysts and investors because
Deerfield-based Walgreens is known for making lots of money from
generic drugs. Its pharmacists encourage customers to switch to them
from expensive brand-name drugs. Insurers also push for generics to
save money. This has helped Walgreens increase profits quarter after
quarter.

The retailer's profit decline opened a rare window into the importance
of generics to Walgreens' bottom line and to the massive clout
insurers and drug-benefit firms have these days. Zocor was a huge
seller as a brand, racking up sales of more than $4 billion in 2005,
its last full year without a generic rival. That made it the biggest
selling drug to convert to generic in Walgreens' history. Generic
copies became available at the end of June 2006.That was good news for
consumers. And for a time, it also was very good news for Walgreens.

In the early months of a generic's debut, Walgreens piles up revenues.
That's because insurers force consumers to switch to the generic from
other brands, in this case not only from Zocor but from Lipitor and
Crestor.

The revenue then tapers off, however, as more generic versions enter
the market and insurers press drugmakers to reduce pricing even more.

That's exactly what happened earlier this year, as multiple
manufacturers began selling generic copies and Walgreens was forced to
accept lower payments from insurance companies and pharmacy-benefit
companies who pay the pharmacy chain to fill prescriptions.

Not to mention simvastatin is only $4.00 per month at Walmart.

Be hungry... be healthy... be hungrier... be blessed:

http://HeartMDPhD.com/PressRelease

Prayerfully in the infinite power and might of the Holy Spirit,

Andrew <><
--
Andrew B. Chung, MD/PhD
Lawful steward of http://EmoryCardiology.com
Bondservant to the KING of kings and LORD of lords.

.

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