Health and Healthcare

What to Expect From Express Scripts Earnings

Chris Lange

Published: February 16, 2016 12:40 pm

Last Updated: January 13, 2020 1:08 pm

Express Scripts Holding Co. (NASDAQ: ESRX) is set to report its fourth-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $1.56 in earnings per share (EPS) on revenue of $26.58 billion. In the same period of the previous year, it posted EPS of $1.39 and $26.31 billion in revenue.

Investing in the drug business via biotechs and pharma stocks has become much more complicated. On top of political pressure over drug pricing, and companies being targeted by short sellers and anti-activists, companies that wholesale and retail drugs are occasionally putting drug companies in their bull’s-eye.

This is likely to draw more attention to the role of pharmacy benefit managers (PBMs) in drug pricing. One of the leading Democratic presidential candidates, Hillary Clinton, tweeted in late 2015 about the recent price gouging on an old drug, and that had a negative impact on the biotech stocks that we are still seeing in 2016. Many questions over the mechanism for drug pricing have yet to be answered.

However, as the discussions on the topic continue, Oppenheimer issued a report in which it noted that it believed PBMs will come into the discussion. PBMs continue to play a key role in gaining considerable pricing discounts for the patients and sponsors, and they are expected to play a significant role to counterbalance the oncoming trend of high-cost specialty prescription mix in drug spending.

Any regulatory changes to drug pricing could elevate the role of the PBM industry but at the same time could limit the impact PBM players could have on the pricing, if pricing is controlled by regulations.

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