Aug 20 Drugstore retailer Walgreen Co's Chief Financial Officer, Wade Miquelon, and another top executive lost their jobs after a $1 billion forecasting error in the company's Medicare-related business, the Wall Street Journal reported.
Walgreen named Kraft Foods Group Inc's former CFO, Timothy McLevish, to replace Miquelon on Aug. 4. Miquelon will continue as advisor to assist the company with its strategic partnership with Alliance Boots Holding Ltd.
Miquelon, Walgreen's CFO of six years, had forecast $8.5 billion in pharmacy unit earnings for the year ending August 2016 at an April board meeting before cutting it by $1.1 billion last month, the paper said. (on.wsj.com/VEh0xC)
The forecast was based partly on contracts to sell drugs under Medicare, the financial daily reported.
Last month, Walgreen's president of pharmacy, health and wellness, Kermit Crawford, announced his retirement after 31 years with the company.
Crawford's departure too comes as a result of the forecasting error, WSJ said.
Walgreen was not immediately available for comment.
The company, which gets 25-30 percent of its prescriptions from Medicare Part D plans, had not factored in a spike in the price of some generic drugs that it sells as part of annual contracts, the paper said.
Medicare Part D subsidizes the cost of prescription drugs and prescription drug insurance premiums for Medicare benefits in the United States.
Walgreen would pay Miquelon severance of $3.2 million and a performance bonus of about $1.2 million, and pay $3.3 million to Crawford as severance and consultation fees, the company said in a regulatory filing this month.
Miquelon, 49, joined Walgreen in June 2008 as senior vice president and CFO. In 2012, he was promoted as executive vice president, CFO and president, international, and joined the board of Alliance Boots. (Reporting by Shailaja Sharma in Bangalore; Editing by Joyjeet Das)