Why Are Reimbursement Rates Such Trouble For Walgreen And Other Drugstore Chains?

More often than not, the reason for this margin pressure has been reimbursement rates, combined with generic price inflation. In fact, "cost" and "margin" were the most frequently used words during the company's Q1'15 earnings release (after "quarter", "year" and "thank"). Walgreen's top competitors, CVS Health and Rite Aid aren't immune to this pressure either. However, the fact that they have PBM services divisions of their own, puts them in a better position to manage these headwinds.