Express Scripts reports 20% profit growth in second quarterReprints
Express Scripts Holding Co. reported a 20.1% increase in net income for the second quarter of 2016 to $720.7 million, with its CEO saying the firm is “positioned for growth.”
Meanwhile, revenue decreased less than 1% compared with the prior-year quarter to $25.22 billion, the pharmacy benefit manager said Monday in its earning report.
“We are pleased with our financial performance year-to-date and continue to execute on our strategy, the lower cost and improved health outcomes, while generating shareholder value,” Eric Slusser, Express Scripts’ executive vice president and chief financial officer, said during a Tuesday conference call with analysts.
“As the health care industry changes, a primary need of payers and patients remains the same: access to affordable medicine,” Express Scripts CEO and President Tim Wentworth said in a statement accompanying the earnings report. “An increase in our expected 2017 retention rate to a range of 96% to 98% is a direct result of our unique business model of client alignment, the industry’s most focused and innovative solutions, and a compassionate culture of caring employees.”
During the call, Mr. Wentworth said “the health care environment remains unpredictable and volatile,” but that the pharmacy benefits manager is “positioned for growth.”
He added that “payers are facing a population that’s growing older, demanding more health care, and wanting a greater say in how that care is delivered.”
When asked how much “employer carve-out business” Express Scripts could retain if it parted ways with Anthem Inc., Mr. Wentworth said “all our energy has been spent servicing Anthem’s members and positioning ourselves to be their best choice when they reach the point of needing to make a choice in pharmacy.”
Seeking about $15 billion in damages, Anthem filed a lawsuit against Express Scripts earlier this year alleging that the company overcharges for prescription drugs.
Express Scripts provides pharmacy benefit management services to Anthem and its designated affiliates under a 10-year agreement executed in 2009. But in its Monday results statement, Express Scripts said it began amortizing the agreement in March, which has led to an “additional $31.7 million of revenue amortization recognized for the three months ended June 30, 2016, and $42.2 million of revenue amortization recognized for the six months ended June 30, 2016.”
For the first half of the year, Express Scripts’ revenues decreased 0.6% to $50.01 billion, compared with $50.35 in the same period last year, according to the statement. And net income attributable to the company increased 20.2% to $1.25 billion from $1.04 billion in the first half of 2015.