Inside This Issue - News
Walgreens looks back at productive year
January 21st, 2013
by David Pinto
CHICAGO – Walgreen Co.'s 2012 annual shareholders meeting will be remembered as among the most impressive in the long series, both for the accomplishments that framed the event and for the message Greg Wasson, Walgreens’ president and chief executive officer, delivered in explaining what have arguably been the most productive, if sometimes confusing, 12 months in the retailer’s 112-year history.
Leading Wasson’s agenda was an explanation of the partnership with Alliance Boots, Europe’s leading drug wholesaler and retailer, which was announced last June. Walgreens’ CEO laid out a convincing rationale for the merger, detailing the size and global impact of the new organization and the influence it will soon begin to exert both in the United States and around the world.
Wasson also spent considerable time discussing the Walgreens-Express Scripts rift that saw the drug chain walk away from Express Scripts’ business a year ago and, as a result, hurt the retailer’s pharmacy and front-end sales for much of 2012.
The Walgreens executive insisted that the company made the correct decision in distancing itself from what he implied were Express Scripts’ onerous terms, terms that differed sharply from those of other pharmacy benefits organizations. He further stressed that Walgreens has recaptured many of the customers it lost before the two parties agreed, last fall, to resume their business relationship, and that the majority of those who have not yet returned will soon do so.
Wasson touched on several other subjects in his 30-minute presentation. But his overall theme was the changing nature of health care in America, and he made a compelling case for the theory that Walgreens was more than a part of that change, it was leading it.
To that end, he spoke of the changing role of the Walgreens pharmacist, one that will put increasing emphasis on providing care and influencing patient outcomes going forward, and less emphasis on the dispensing of medicines.
To further make his point, Wasson noted that Walgreens has dispensed more flu vaccinations thus far this year than any other U.S. health care organization and, more important, that the drug chain has emerged, through its pharmacies and immediate care clinics, as a leader in dispensing a growing variety of vaccinations.
Along the way, Wasson took several moments to allude to and praise the growing stature of retail pharmacists, noting that they are increasingly recognized as the patient’s first line of defense, information and help in their struggle to stay healthy in a society notable for a growing shortage of primary care physicians.
“Some 75% of Americans either do not have easy access to a primary care physician,” he said. “or choose not to take advantage of the access they have.”
The audience in attendance at the annual meeting, some 2,000 people in all, generally approved of both the message Wasson delivered and the future of the company that many of them have long supported financially (it should be noted that the audience was largely composed of middle-age Americans who have long held Walgreens shares).
However, a few attendees, mostly those with private or personal agendas, questioned the Alliance Boots merger, stating either that they didn’t understand it or that they questioned how it would help, or even change, a U.S.-based drug chain. But Wasson held his ground, insisting the merger will in time recast chain drug retailing, wholesaling and supply chain management on a global basis. Most members of the audience clearly agreed.
Several Alliance Boots executives were in the audience, most notably Stefano Pessina and Ornella Barra, the two senior Alliance Boots executives, as well as Alex Gourlay, the executive in charge of the Boots drug chain. Though they played a supporting role at this meeting, it was clearly evident that their place going forward will be comparable to that of the Walgreens executives with whom they are now in partnership.
Wasson concluded the meeting by noting that the headwinds of 2012 will become the tailwinds of 2013. Though he was specifically alluding to the Express Scripts squabble, he might as well have been speaking of the difficult business environment in the year just ended.