Walgreens 2008 Annual Report Download - page 6

These facilities will position us as one of the nation’s foremost
providers of health and wellness services. They are highly
complementary to our retail pharmacies and increase awareness
of our Walgreen brand.
The satisfaction of both patients and nurse practitioners in our
Take Care in-store clinics is very high. The clinics are bringing
new people into the health care system by offering high quality,
accessible and affordable solutions. A study by the nonprofit
Rand Corp. found retail health clinics are attracting patients who
are not “routine users of the current health care system,” and do
not have a primary care physician. Take Care’s nurse practi-
tioners regularly refer patients who need more in-depth care
to physicians, keeping them out of high-cost emergency rooms.
Our Health & Wellness division is also the largest operator of
worksite health centers and pharmacies in the country. At fiscal
year-end, we had 364 clinics on or near employer campuses,
offering diverse services including primary and acute care;
wellness, pharmacy and disease management services; and
health and fitness programming. Employers recognize the
significant value and cost savings these centers can provide.
Specialty pharmacy is the fastest growing sector of pharmacy,
expanding at about 15 percent a year. It is also very
complementary to our core retail pharmacies. Of the new
products awaiting FDA approval in 2008, 80 percent are
specialty drugs, according to IMS Health. We’ve built our
specialty business primarily through acquisitions, the largest
of which was our 2007 purchase of OptionCare, which was
accretive to earnings in its first year of operation.
Our discussions with current and potential clients indicate
that our independence from a major PBM (pharmacy benefits
manager) is a significant factor in winning business, such as
the specialty pharmacy contract we signed earlier this year
with Prime Therapeutics, a PBM owned by 10 Blue Cross
Blue Shield plans covering 20 million lives.
We’ve built the foundation of the most patient friendly
pharmacy, health and wellness delivery network in the
country – one that offers an affordable, accessible, quality
solution to managed care, government and large employers.
This includes 6,400-plus retail stores nationwide; our fast-
expanding health and wellness clinics in stores and on
employer campuses; drug infusion centers; and the largest
independent specialty pharmacy business in the country.
Walgreens mission is to provide the most convenient access
to consumer goods and services…and pharmacy, health and
wellness services – to our customers, patients, employers
and payors – in communities where people live and work
across America. This will build brand loyalty, sales, profits
and shareholder value.
We’ve expanded our management team and
investor communications
We’ve expanded our leadership team to help drive bold,
creative and innovative responses to a rapidly changing retail
and health care environment. In the past six months, Wade
Miquelon joined our team as CFO, Sona Chawla as senior VP
of E-commerce, and Kim Feil as chief marketing officer. We
welcome the new ideas and challenges that they’re bringing
to our organization.
In 2008, we held regular quarterly earnings conference calls,
providing clarity to our communication with investors. And in
late October, we hosted an Analysts’ Day to share our vision
of how – and why – Walgreens is changing and growing to
offer Americans a compelling solution to their shopping and
pharmacy, health and wellness needs.
Walgreens Store Growth
Drugstores as of August 31
Return on Invested Capital
In percent
Page 4 2008 Walgreens Annual Report