Express Scripts Earnings Meet Estimates as Drug Claims Rise

  • Adjusted earnings per share of $1.22 in line with analysts
  • Average profit on prescriptions processed fell 8 percent

Express Scripts Holding Co. reported first-quarter earnings that met analysts’ estimates, as the number of prescriptions processed by the drug benefits manager rose.

Profit excluding one-time items was $1.22 a share, St. Louis-based Express Scripts said Monday in a statement. Adjusted prescription claims increased 5.2 percent to 323.5 million.

The shares fell less than 1 percent to $73.35 at 11:23 a.m. in New York. Express Scripts has slumped about 16 percent this year through Monday’s close amid a dispute with its biggest customer, Anthem Inc.

Anthem, the No. 2 U.S. health insurer by membership, says it’s being overcharged by Express Scripts by billions of dollars a year. Anthem filed a lawsuit last month, asking for the option to end its relationship with Express Scripts. In a countersuit filed last week, Express Scripts said it doesn’t owe the health insurer any price reductions under their current contract, which goes through 2019, and accused Anthem of failing to negotiate in good faith.

Express Scripts told investors on Tuesday that it would like to continue working with Anthem, and that it thinks it’s Anthem’s best option for pharmacy-benefits management. Express Scripts said yesterday that it made an accounting change because it now sees a higher likelihood of its agreement with Anthem not being renewed, or being renewed on “substantially different terms.”

Express Scripts said the average profit on each prescription the company processed fell from a year ago, with Ebitda per adjusted claim falling 8.3 percent to $4.51 from $4.92 a year earlier. Ebitda refers to earnings before interest, taxes, depreciation, and amortization. First-quarter net income rose to $526.1 million, or 81 cents a share, from $441.1 million, or 60 cents a share, a year earlier.

Raised Forecast

Employers and other customers pay Express Scripts to keep the cost of drugs by down by switching patients to generics versions of medicines, and by pitting manufacturers of brand drugs against each other to get on the company’s list of covered drugs.

More from the company statement:

  • The company raised its 2016 adjusted earnings forecast to $6.31 to $6.43 a share, from the previously announced range of $6.10 to $6.28 a share.
  • Express Scripts forecast second-quarter adjusted diluted earnings per share of $1.55 to $1.59.
  • Revenue fell 0.4 percent to $24.8 billion.
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