Walgreens 2015 Annual Report Download - page 8

Retail Pharmacy USA
Our Retail Pharmacy USA division has pharmacy-led health and beauty retail businesses in 50 states, the District
of Colombia, Puerto Rico and the U.S. Virgin Islands, each focused on helping people feel healthy and happy.
We operated 8,173 retail stores in the division as of August 31, 2015. Our principal retail pharmacy brands in the
division are Walgreens and Duane Reade. We are a market leader in the United States and, as of August 31,
2015, approximately 76% of the population of the United States lived within five miles of a Walgreens or Duane
Reade retail pharmacy.
We provide customers with convenient, omni-channel access to consumer goods and services, including own
branded general merchandise such as NICE!, DeLishTM and Well at Walgreens, as well as pharmacy and health
and wellness services in communities across America. Our websites receive an average of approximately
68 million visits per month. Integrated with our e-commerce platform, the Walgreens mobile application allows
customers to refill prescriptions through scan technology, receive text messages alerting when a refill is due and
other retail functionality, such as photo and shopping features.
Our services help improve health outcomes for patients and manage costs for payers including employers,
managed care organizations, health systems, PBM companies and the public sector. We utilize our retail network
as a channel to provide health and wellness services to our customers and patients, as illustrated by our ability to
play a significant role in providing flu vaccines and other immunizations. We also provide specialty pharmacy
services and manage in-store clinics branded as “Healthcare Clinic”, with more than 400 locations throughout the
United States as of August 31, 2015. We have more than 74,000 healthcare service providers, including
pharmacists, pharmacy technicians, nurse practitioners and other health related professionals.
The components of the division’s sales are Pharmacy (the sale of prescription drugs and provision of pharmacy-
related services) and Retail (the sale of healthcare and retail products including non-prescription drugs, beauty,
toiletries and general merchandise). The division’s sales are subject to the influence of seasonality, particularly
the winter holiday and cough, cold and flu seasons. This seasonality also can affect the division’s proportion of
sales between Retail and Pharmacy during certain periods. The components of the division’s fiscal year total
sales were as follows:
Fiscal 2015 Fiscal 2014 Fiscal 2013
Pharmacy 66% 64% 63%
Retail 34% 36% 37%
Total 100% 100% 100%
We filled approximately 723 million prescriptions (including immunizations) in the division in fiscal
2015. Adjusted to 30-day equivalents, prescriptions filled were 894 million in fiscal 2015. Sales where
reimbursement is received from managed care organizations, governmental agencies, PBM companies and
private insurance were 96.8% of the division’s fiscal 2015 pharmacy sales.
We fill prescriptions for many state Medicaid public assistance programs. Revenues from all such Medicaid
plans were approximately 4.5% of the division’s fiscal 2015 total sales. Revenues from Medicare Part D plans
were approximately 15.9% of the division’s fiscal 2015 total sales.
Our U.S. loyalty program, Balance®Rewards, is designed to reward our most valuable customers and encourage
shopping in stores and online. Balance Rewards members receive special pricing on select products and earn
everyday rewards points for purchasing most merchandise that can be instantly redeemed at our stores or through
walgreens.com. As of August 31, 2015, the number of active Balance Rewards members totaled approximately
85 million. For this purpose, we define an active member as someone who has used their card in the last six
months.
-4-