Express Scripts SWOT and PESTLE Analysis

Strength

1. A broad spectrum of product offerings: Express Scripts Holding Inc. provides its vast portfolio of products & services under two broad segments - Pharmacy Benefit Management (PBM) and Other Business Operations where PBM services provided by Express Scripts include retail network pharmacy management in the domestic market and Canada, retail drug card programs, home delivery services, benefit design consultation, drug utilization review, drug formulary management programs, compliance and therapy management programs, Medicare Part D and Medicaid products, distribution of injectable drugs to patient homes and physician offices, fertility services to providers and patients, bio-pharma services including reimbursement and customized logistics solutions, improved health outcomes through personalized medicine and application of pharmacogenomics. The Other Business Operations segment primarily consists of the distribution of pharmaceuticals and medical supplies to providers and clinics in order to guide the safe, effective and affordable use of medicines.

2. Features amongst the leaders on America’s Fortune 500 companies: Express Scripts is the only truly independent PBM and also happens to be the largest in the US healthcare services market. The company has once again made its position in list of America’s Fortune 500 companies at the 25th position in 2018and is moving upwards constantly. Its net revenues increased by a huge margin of over 33% year-on-year to an amount of $4.51 billion for fiscal year 2017. The reason for this huge jump has been the fact that the company majorly benefitted from a surplus in the demand for insurances by American citizens under the Affordable Care Act. As of 2018, Express Scripts is the 25th largest organization in North America and the biggest PBMO in the United States.

3. Persistent focus on new product development and innovation: Express Scripts is committed to simplifying and improving the pharmacy experience for more than 85 million patients as of 2018. In order to cater to this enormous customer base the organisation is determined to come up with better & innovative pilot programs. Express Script’s Therapeutic Resource Centres also help in creating smarter & targeted healthcare solutions. The Express Scripts Inc. Pharmacy Lab for the purpose of R&D is divided into 3 broad teams namely- i. Specialized Care ii. Decision Design iii. Research & Analytics. Its new innovative pilot program for performance-based retail pharmacy network gives its members greater savings, service and safety and also the new innovative value-based SafeGuardRx Program delivers better care at lower cost for its patients and plan sponsors.

4. Patient-centric approach: The reason why Express Scripts Inc. enjoys a tremendous level of brand loyalty from their customers is because of the reason that all their decisions, strategies & models are directed absolutely as per the needs of the patients. For patients who are unable to afford the high drug costs, Express Scripts has launched Inside Rx to help them along with those who are uninsured and underinsured, with special discount programs. The company has also launched a special program Accredo, for those who suffer from complex diseases such as cancer, HIV, mental illness and other conditions that require special focus and care.

5. Consistently strong financial results: The Company’s leadership in the PBM sector has always proved fruitful for the year- end financial results. Every year Express Scripts Inc. has recognised growth in their net incomes and sales volume. The 2017 GAAP earnings per diluted share grew 44%, driven by an 8% increase in Operating Income & a growth of 11% in the adjusted earnings per diluted share in the year 2017 over the earnings of year 2016. The organisation also looks forward to investing $600 million to $650 million to improve their overall patient, client, physician & employee experience.

Weakness

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Opportunity

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Threat

Political

1. Anti-trust laws related to healthcare plans: Anti-trust law reforms in the US ensure that the consumers benefit first from the free-market competition in the Pharma Industry. This law has played a crucial role in eliminating formations of any strategic collaborations or profit-making monopolies. The free market competition leads to lower costs, higher quality services which will ensure investment and innovation. It is the job of the Federal Trade Commission (FTC) as a law enforcer to ensure whether these laws are followed and stop firms from engaging in any anti-competitive activities.

2. Government overpaying for healthcare of citizens: The United States health agencies has predicted that the healthcare spending will rise to 5.3% for the year 2018 which is a sharp rise from the 2017 spending which the Centre for Medicaid & Medicare Services, which provides for health insurance for the poor & disabled, estimated to be a 4.6% climb. This increase is primarily because of the increase in prices of drugs, an aging baby-boom population & more disposable income.

3. Establishment of the American Patients First law: The department of Health & Human Services (HHS) has identified 4 challenges in the US healthcare market- i. High prices for drugs ii. Government overpaying for drugs due to lack of negotiation skills iii. Rising out-of-pocket costs for consumers’ iv. Foreign governments free-riding of American investment in innovation. In order to tackle these challenges’, the Trump government has come up with the American Patients First Law which will identify the following 4 strategies – 1) Improved Competition 2) Better negotiation strategies 3) Incentives for lower list prices 4) Lowering out-of-pocket costs

Economical

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Social

1. Negative drug trend: Express Scripts Inc. has reported a negative drug trend for the year 2017 over year 2016 which is estimated to be a drop in the healthcare spending per person of 44% of their clients. The company is proud of the fact that even when the costs of prescription drugs are rising they have been able to compete in the market and come up with solutions in order to reduce costs and improve access and quality.

2. Higher dependency on prescription drugs for better health: Americans today are more dependent on drugs than any other time in the history of the US. The amount of harm caused by these inappropriate prescriptive drugs is staggering. Although more than 90% of the diseases can be cured with the help of prescriptive drugs Americans have come to believe that every hint of a disease requires a drug to be cured. This dependency on drugs is actually becoming a culture among Americans which is encouraged by the intense marketing activities of drug manufacturing companies.

3. Increasing population of people suffering from complex diseases: An increasing trend is being reported in the occurrence of incurable chronic diseases impacting over 133 million Americans, accounting for over 40% of the total population. According to expert estimates, by 2020, this number is will balloon to a whopping 157 million, with 81 million nursing multiple conditions. An increasing number of people are living with multiple complex diseases such as diabetes, heart disease or depression, having two or more conditions. This suggests that there is an increasing demand for PBM service providers in the market such as Express Scripts which can help patients suffering from these diseases to cure faster.

Technological

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Legal

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Environmental

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