Walgreen Competition
Now Viewing Walgreen's competition in: Drugstores (primary)
Recent Developments
Medicaid Reimbursement Cuts may Cause Pharmacy Closures - The Deficit Reduction Act (DRA) of 2005 could cause 11,105 US pharmacies to close due to reductions in the Medicaid reimbursement rate, according to the National Association of Chain Drug Stores (NACDS) and the Food Marketing Institute (FMI). The closures would particularly harm rural areas and urban neighborhoods with large Medicaid populations. The largest percentage reductions in pharmacies are projected in New York (40 percent); DC (37 percent); Louisiana (32 percent); West Virginia (30 percent); and Alaska (28 percent).
Veto of Medicare Bill Overridden - Congress has overriden President Bush's veto of the Medicare Improvements for Patients and Providers Act of 2008. The legislation mandates weekly updating of Medicare prescription drug pricing and prompt payment of prescription drug payments under Medicare Part D. It also delays implementation of Round 1 of Medicare's durable medical equipment, prosthetics, orthotics, and supplies competitive bidding program.
Online Medication Sales may Fuel Drug Abuse - A significant majority of websites that advertise or sell controlled medications don't require a proper prescription, according to the National Center on Addiction and Substance Abuse. Federal officials say that the online trade fuels abuse of addictive and dangerous prescription drugs. The DEA found that 85 percent of all online prescription drug sales involved controlled substances, compared with 11 percent of prescription drug sales at traditional pharmacies.
Competitive Landscape
Demand is driven by the aging of the US population and advances in medical treatment. The profitability of individual companies depends on access to medical insurance groups. Large companies have economies of scale in purchasing and in access to large groups of customers. Small companies can compete effectively through convenient location or special merchandising. Average annual revenue per employee is close to $200,000.
Drugstores Industry Forecast
from Hoover's/D&B subsidiary First Research
US personal consumption expenditures for drug preparations and sundries, major indicators for drugstores, are forecast to grow at an annual compounded rate of 10.1 percent between 2007 and 2012.
Consumer Drug and Sundries Spending Growth Strong and Steady
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: Increased sales of non-drug items
- Economies of scale favor chains
- Risk: Insurers squeeze drug prices
Industries Where Walgreen Competes
- Retail
- Drug Stores & Pharmacies (primary)
- Apparel & Accessories Retail
- Consumer Electronics & Appliances Retail
- Cosmetics, Beauty Supply & Perfume Retail
- Health Care
