Express Scripts puts blame on economy; Street unsure
(Reuters) - Express Scripts Holding Co (ESRX.O) on Tuesday said its business of managing pharmacy benefits for large employers will come under pressure next year due to a weak economy, but investors questioned whether the company's own strategy was on track.
Shares of Express Scripts, which became the largest U.S. pharmacy benefits manager after buying rival Medco Health Solutions earlier this year, fell 13 percent, a day after the company warned that Wall Street's 2013 forecasts were too aggressive.
Company executives, in a conference call on Tuesday that was punctuated by heated exchanges with industry analysts, tried to explain its view.
"Large employers have pulled back on hiring plans, using contractors and part-time employees when necessary. Mid- and small employers are cutting back on healthcare decisions while waiting for more clarity on healthcare reform," Chief Executive George Paz said during the call.
"And we continue to see low rates of drug utilization as individuals deal with uncertainty at the household level," Paz said, referring to a cutback on spending by Americans as they worry about their job security.
Analysts asked Express Scripts to reconcile its view with that of other industry sources who expect an increase in drug use next year that would benefit the sector as a whole.
Express Scripts competes against CVS Caremark Corp. (CVS.N), whose shares were up 0.5 percent to $46.88, and Catamaran Corp. (CCT.TO)(CTRX.O), whose U.S.-listed shares were off 2.2 percent at $48.55.
Shares of Express Scripts were off $8.29 at $52.59 near midday. (Reporting By Caroline Humer; Editing by Gerald E. McCormick and Leslie Adler)