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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (92347)7/8/2002 8:14:33 AM
From: John Carragher  Read Replies (1) | Respond to of 99280
 
If you have to buy a drug at the store... you have a co pay of $20. the $20 is not recorded by the industry as income as they never see the $20. Merck records the $20. and then they expense the $20.... so they inflate the revenue line. Others in this sector do not account for co pay in revenue line.

my understanding of what it is all about.



To: orkrious who wrote (92347)7/8/2002 8:19:32 AM
From: pvz  Respond to of 99280
 
>>A pharmacy-benefits manager such as Medco uses the combined buying power of millions of people in its plans to extract discounts and rebates from drug makers and pharmacies. These companies then pass on some of the savings to clients -- employers and health-insurance companies -- looking to save money on prescription drug costs.<<

My understanding from the above is that the "missing" $20 is effectively a kind of volume discount, hence no effect on the bottom line.


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