Latest news with #OptumRX
Yahoo
2 days ago
- Health
- Yahoo
Family blames cost of Walgreens asthma meds for son's death
(NewsNation) — A Wisconsin family is suing Walgreens after they say the rising costs of asthma medication led to the death of their 22-year-old son last year. Cole Schmidtknecht suffered from asthma his entire life, and one day tried to get a refill on his inhaler — only to find out his medication, which typically cost less than $70, had skyrocketed to $500. He had a severe asthma attack five days after his pharmacy visit, stopped breathing, and collapsed, according to his father. Schmidtknecht never regained consciousness and died. Doctors attributed his death to asthma. Woman dies from brain-eating amoeba after using tap water to clear sinuses: CDC 'Cole became very accustomed to asthma,' said Bil Schmidtknecht. 'His struggles were very traditional, as any asthmatic has. He was fortunate to have health insurance through us as he grew up. And we were very versed on asthma, as I have it and Shanon has it too. From a young age, we taught him how to manage it.' Shanon Schmidtknecht, Cole's mother, revealed he had never had issues getting his medication before the incident, nor had she and her husband. 'It wasn't until I went to pick up Bill's same medication on the same insurance plan that we had realized what happened with the price increase,' she added. Schmidtknecht's death caught the attention of Rep. Jake Auchincloss, D-Mass., who shared his story on the House floor in December. 'Cole had his whole life ahead of him,' Auchincloss said. 'Because Cole was forced to choose between paying his rent or shelling out hundreds of dollars to cover his medication out of pocket for a drug that did not need to be that expensive, his family is without their loved one. There's no justification for a family facing Thanksgiving without their child. Cole's death was preventable.' Scientists hooking flies on cocaine to study addiction: Reports Now, the Schmidtknecht family has chosen legal action against Walgreens and OptumRX. They allege OptumRX violated Wisconsin law by raising the cost of the medication without a valid medical reason and failing to provide 30 days' advance notice of drug price increases. 'There's blame to go around to OptumRX and Walgreens Pharmacy,' said Michael Trunk, the family's attorney. 'We have a young man who was on Advair Diskus for a decade, actively and effectively controlling his asthma.' Walgreens, in a statement, said, 'Walgreens extends its deepest condolences over the tragic loss of Cole. While we are unable to discuss specific patient interactions due to privacy restrictions, in general, in cases where a medication is not covered by insurance, pharmacy staff may work with the plan patient, and/or prescriber in an effort to process and dispense the prescription if able.' According to the Allergy and Asthma Network, the cost to treat asthma per person is $3,300. Currently, 28 million people are suffering from asthma in the U.S, which amounts to $82 billion annually for health care costs. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
07-03-2025
- Business
- Yahoo
Walgreens stock rises amid $10 billion deal with Sycamore Partners to take the drugstore chain private
Walgreens Boots Alliance (WBA) finalized a $10 billion deal, worth as much as $23.7 billion, with Sycamore Partners to go private after four months of negotiations, the companies announced Thursday. The drugstore giant's stock jumped almost 7% in premarket trading on Friday after the news that the company was preparing to exit the public markets. Sycamore is a New York-based private equity firm that specializes in retail business investments. It has invested in brands like Staples, Ann Taylor Loft, Aéropostale, and Express. Walgreens entered into a definitive agreement to be acquired by an entity affiliated with Sycamore, the company said in a statement late Thursday. Shareholders will receive a total of $11.45 per share in cash, or $10 billion, at the closing of the Sycamore transaction, the statement said. The additional value in the deal comes from an added $3 in future monetization of the company's debt and equity interest in VillageMD. "Throughout our history, Walgreens Boots Alliance has played a critical role in the retail healthcare ecosystem," CEO Tim Wentworth said in the statement. "We are focused on making healthcare delivery more effective, convenient and affordable as we navigate the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape." "While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company," he added. The deal includes all elements of Walgreens, including VillageMD, which the company is winding down its stake in, and a specialty pharmacy unit. It also includes the Alliance Boots business, which was acquired in 2014 and is one of the company's strongest assets. Walgreens pharmacy benefit manager (PBM) is also part of the deal. It, too, has been deemed a strong asset by investors, but it never captured significant market share against the three largest PBMs: UnitedHealth's Optum RX (UNH), CVS's Caremark, and Cigna's Express Scripts (CI). Walgreens stock climbed when the deal was first reported in December as investors looked for a shake-up. The company has been downgraded by a few firms and has a majority of Hold ratings — 11 total — as of this week. Walgreens, valued at more than $100 billion in 2015, has dropped in the past couple of years to under $10 billion as it struggled to prove its value in the growing e-commerce environment. For fiscal year 2024, Walgreens reported revenue of $147 billion, up 6% year over year. But the company also reported a loss per share of $10. The take-private deal marks an end to Walgreen's presence in the stock market, just shy of 100 years. It first went public in 1927, 26 years after the first store opened in 1901. The company suspended its quarterly dividend to stockholders for the first time in its history this January as it continued negotiations with Sycamore. "This change in capital allocation is aimed at strengthening WBA's balance sheet by reducing debt over time and improving free cash flow, as the company works toward achieving a retail pharmacy-led turnaround underpinned by a sustainable economic model. The company's cash needs over the next several years, including with respect to litigation and debt refinancing, were important considerations as part of the decision to suspend the dividend," the company said in a statement in January. The deal reflects an ongoing decline in publicly traded retail pharmacy giants, as Walgreens follows the path of Rite Aid, which went private last year after climbing out of bankruptcy. With more online competition and reimbursement pressures from insurers and pharmacy benefit managers, only vertically integrated healthcare companies, like CVS (CVS), and grocery store pharmacies, like Walmart (WMT) and Kroger (KR) — entities that rely majorly on other sources of income — can survive. The decline for standalone retail pharmacies began about 10 years ago, according to Jefferies analyst Brian Tanquilut. "If you think about what that came from, it's Amazon (AMZN) eating into the front end of store market share, the dollar stores have grown quite significantly in terms of footprint, and they've [presented] a healthy level of competition for the retail pharmacies. And then the grocery store chains have also ... rolled out the pharmacies they operate," Tanquilut said. Retailers have also faced increased competition in recent years from direct-to-consumer online platforms like Hims & Hers (HIMS) and Amazon Pharmacy, which have made it easier to access some prescriptions. It's why, despite Walgreens' efforts to turn around the company under CEO Tim Wentworth's leadership by shuttering stores in low-performing markets, it was unable to compete and avoid the take-private deal. Mizuho Securities healthcare expert Jared Holz noted that it wasn't so much an end of an era for retail pharmacies as it was just another retailer having to come to terms with the online environment. But beyond that, the company had not pivoted in time to match the vertical integration at scale that CVS achieved with the acquisition of health insurer Aetna, as well as health services, even though the latter also has questions swirling about the viability of its healthcare endeavors. "They've probably tried to emulate CVS as much as they can. And they are subscale in ... pretty much all of the non-retail elements of the business," Holz said. Other analysts have similarly noted that many of Walgreens' acquisitions or investments lagged CVS or were in areas that didn't pan out as expected. "There are little synergies between Walgreens' three major business lines (the U.S. Retail Pharmacy, International, and U.S. Healthcare (VillageMD/Summit). Whether public or private, the focus for Walgreens is to streamline operations and to pay down debt as the company continues to struggle to generate meaningful cash flow," wrote BofA Securities analyst Allen Lutz in a recent note to clients prior to the deal. He similarly focused on how Walgreens failed to truly compete with CVS. "Overall, the retail pharmacy business is likely to remain under structural pressure, given Walgreens' position in the pharmacy supply chain and lack of a direct relationship with a PBM or health plan. We maintain our Underperform rating," Lutz wrote. Correction: A previous version of this article misstated the size of the deal. We regret the error. Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on social media platforms X, LinkedIn, and Bluesky @AnjKhem. Click here for in-depth analysis of the latest health industry news and events impacting stock prices Sign in to access your portfolio
Yahoo
07-03-2025
- Business
- Yahoo
Walgreens announces a $10 billion deal with Sycamore Partners to take the drugstore chain private
Walgreens Boots Alliance (WBA) finalized a $10 billion deal, worth as much as $23.7 billion, with Sycamore Partners to go private after four months of negotiations, the companies announced Thursday. Sycamore is a New York-based private equity firm that specializes in retail business investments. It has invested in brands like Staples, Ann Taylor Loft, Aéropostale, and Express. Walgreens entered into a definitive agreement to be acquired by an entity affiliated with Sycamore, the company said in a statement late Thursday. Shareholders will receive a total of $11.45 per share in cash, or $10 billion, at the closing of the Sycamore transaction, the statement said. The additional value in the deal comes from an added $3 in future monetization of the company's debt and equity interest in VillageMD. "Throughout our history, Walgreens Boots Alliance has played a critical role in the retail healthcare ecosystem," CEO Tim Wentworth said in the statement. "We are focused on making healthcare delivery more effective, convenient and affordable as we navigate the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape." "While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company," he added. The deal includes all elements of Walgreens, including VillageMD, which the company is winding down its stake in, and a specialty pharmacy unit. It also includes the Alliance Boots business, which was acquired in 2014 and is one of the company's strongest assets. Walgreens pharmacy benefit manager (PBM) is also part of the deal. It, too, has been deemed a strong asset by investors, but it never captured significant market share against the three largest PBMs: UnitedHealth's Optum RX (UNH), CVS's Caremark, and Cigna's Express Scripts (CI). Walgreens stock soared more than 5% in after-hours trading after it announced it was preparing to exit the public markets. The stock climbed when the deal was first reported in December as investors looked for a shake-up. The company has been downgraded by a few firms and has a majority of Hold ratings — 11 total — as of this week. Walgreens, valued at more than $100 billion in 2015, has dropped in the past couple of years to under $10 billion as it struggled to prove its value in the growing e-commerce environment. For fiscal year 2024, Walgreens reported revenue of $147 billion, up 6% year over year. But the company also reported a loss per share of $10. The take-private deal marks an end to Walgreen's presence in the stock market, just shy of 100 years. It first went public in 1927, 26 years after the first store opened in 1901. The company suspended its quarterly dividend to stockholders for the first time in its history this January as it continued negotiations with Sycamore. "This change in capital allocation is aimed at strengthening WBA's balance sheet by reducing debt over time and improving free cash flow, as the company works toward achieving a retail pharmacy-led turnaround underpinned by a sustainable economic model. The company's cash needs over the next several years, including with respect to litigation and debt refinancing, were important considerations as part of the decision to suspend the dividend," the company said in a statement in January. The deal reflects an ongoing decline in publicly traded retail pharmacy giants, as Walgreens follows the path of Rite Aid, which went private last year after climbing out of bankruptcy. With more online competition and reimbursement pressures from insurers and pharmacy benefit managers, only vertically integrated healthcare companies, like CVS (CVS), and grocery store pharmacies, like Walmart (WMT) and Kroger (KR) — entities that rely majorly on other sources of income — can survive. The decline for standalone retail pharmacies began about 10 years ago, according to Jefferies analyst Brian Tanquilut. "If you think about what that came from, it's Amazon (AMZN) eating into the front end of store market share, the dollar stores have grown quite significantly in terms of footprint, and they've [presented] a healthy level of competition for the retail pharmacies. And then the grocery store chains have also ... rolled out the pharmacies they operate," Tanquilut said. Retailers have also faced increased competition in recent years from direct-to-consumer online platforms like Hims & Hers (HIMS) and Amazon Pharmacy, which have made it easier to access some prescriptions. It's why, despite Walgreens' efforts to turn around the company under CEO Tim Wentworth's leadership by shuttering stores in low-performing markets, it was unable to compete and avoid the take-private deal. Mizuho Securities healthcare expert Jared Holz noted that it wasn't so much an end of an era for retail pharmacies as it was just another retailer having to come to terms with the online environment. But beyond that, the company had not pivoted in time to match the vertical integration at scale that CVS achieved with the acquisition of health insurer Aetna, as well as health services, even though the latter also has questions swirling about the viability of its healthcare endeavors. "They've probably tried to emulate CVS as much as they can. And they are subscale in ... pretty much all of the non-retail elements of the business," Holz said. Other analysts have similarly noted that many of Walgreens' acquisitions or investments lagged CVS or were in areas that didn't pan out as expected. "There are little synergies between Walgreens' three major business lines (the U.S. Retail Pharmacy, International, and U.S. Healthcare (VillageMD/Summit). Whether public or private, the focus for Walgreens is to streamline operations and to pay down debt as the company continues to struggle to generate meaningful cash flow," wrote BofA Securities analyst Allen Lutz in a recent note to clients prior to the deal. He similarly focused on how Walgreens failed to truly compete with CVS. "Overall, the retail pharmacy business is likely to remain under structural pressure, given Walgreens' position in the pharmacy supply chain and lack of a direct relationship with a PBM or health plan. We maintain our Underperform rating," Lutz wrote. Correction: A previous version of this article misstated the size of the deal. We regret the error. Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on social media platforms X, LinkedIn, and Bluesky @AnjKhem. Click here for in-depth analysis of the latest health industry news and events impacting stock prices Sign in to access your portfolio
Yahoo
18-02-2025
- Business
- Yahoo
This Wisconsin couple is suing Walgreens, Optum Rx after their 22-year-old son died of asthma attack
In January 2024, 22-year-old Cole Schmidtknecht went to Walgreens to fill a prescription for an asthma inhaler. He was told the price of the inhaler had increased from $66 to $539 out-of-pocket, reports CBS News. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) A near-record number of Americans are grappling with $1,000 car payments and many drivers can't keep up. Here are 3 ways to stay ahead Protect your retirement savings with these 5 essential money moves — most of which you can complete in just minutes Unable to afford the cost, Schmidtknecht left the pharmacy without filling his prescription and tried to manage with just his rescue inhaler. Days later, he suffered a fatal asthma attack. His parents have now filed a lawsuit against both the pharmacy benefits-management company and Walgreens, claiming they are responsible for their son's death. The Schmidtknechts' lawsuit alleges that the benefits company, Optum RX, owned by UnitedHealth Group, violated Wisconsin law by increasing the prescription's cost without a valid medical reason and failing to provide 30 days' notice of the price increase. The lawsuit claims that the 30-day notice period would have given Cole time to visit his doctor and request an exception to the price increase. It also alleges that he was not offered a free or discounted inhaler while he sought assistance from his provider and that Walgreens informed him that there were no lower-cost alternatives or generic options available. Cole's parents say he had to choose between paying his rent and covering his medication. Five days later, he suffered a severe asthma attack and died due to cardiac arrest. WSAZ News contacted Optum Rx for a response to the situation. A spokesperson wrote, 'Mr. Schmidtknecht's death was tragic, and our thoughts are with his family. The claims made are factually inaccurate.' Walgreens declined to offer a comment. Cole's death is not an isolated incident. The American Hospital Association reported that nearly 30% of Americans say they haven't taken their medication as prescribed due to the high cost. It also estimates more than a million Medicare patients could die in the next decade because they cannot afford their medications. Read more: Home prices in America could fly through the roof in 2025 — here's the big reason why and how to take full advantage (with as little as $10) As the cost of living increases, affording life-saving or even just life-improving medications has become a constant battle for many Americans. However, there are steps you can take to ensure you have the medication you need. Some pharmacies offer discounts or generic options for brand-name prescriptions. Always ask the pharmacy if there is a way to lower the price. Websites like GoodRX, SingleCare, or the manufacturer of the drug may also offer discounts if your insurance plan doesn't cover your medication. Many drug companies offer patient assistance programs (PAPs). These programs are designed to help those who can't afford their medications. Most have their own application process, and the requirements can vary. If you are low-income or your insurance does not cover the medication, you may qualify. If your current pharmacy won't work with you, consider alternatives. Online pharmacies, like Cost Plus, have lower overhead costs, which allows them to offer prescription drugs at a reduced rate. Advair Diskus, the medication Cole required to treat his asthma, is available on the site for just under $100. If you're having trouble affording medications, your doctor may be your best resource. They may be able to switch your prescription to one your insurance covers or recommend a PAP to lower the cost. For some medications, the doctor may be able to offer samples or coupons. Cole's death highlights a growing crisis in the U.S. If you are facing a similar struggle, there are options available. Jamie Dimon issues a warning about the US stock market — says prices are 'kind of inflated.' Crashproof your portfolio with these 3 rock-solid strategies One dozen eggs in America now costs $4.15 — and $14.35 for a pound of sirloin steak. Both record highs. 3 simple ways to protect your wealth in 2025 Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
CBS News
06-02-2025
- Business
- CBS News
Wisconsin couple sues Walgreens, Optum Rx, saying son died after sudden $500 price spike for asthma meds
A Wisconsin couple is suing Walgreens and a pharmacy benefits management company, alleging that their son died because he couldn't afford a sudden $500 spike in his asthma medication. Shanon and William Schmidtknecht, of Poynette, filed their lawsuit in federal court in Milwaukee on Jan. 21, a year to the day that their son Cole died at age 22. According to the lawsuit, Cole Schmidtknecht suffered from asthma all his life. He managed it with daily inhaler doses of the medication Advair Diskus and its generic equivalents. He stopped at a Walgreens pharmacy in Appleton on Jan. 10, 2024, to refill his prescription and was told the cost had jumped from $66 to $539 out-of-pocket. Unable to afford the new cost, he left the pharmacy without the medication. He tried to manage his condition with his rescue inhaler but suffered a fatal asthma attack days later, according to the lawsuit. The Schmidtknechts allege that pharmacy benefits management company OptumRX violated Wisconsin law by raising the cost of the medication without a valid medical reason and failing to provide 30 days' advance notice of drug price increases. Pharmacy benefits managers act as intermediaries between health insurance companies, prescription drug companies and pharmacies. Optum Rx services prescription claims for more than 66 million people across the United States, according to the lawsuit. The lawsuit alleges that the Walgreens pharmacy staffers failed to offer Cole any workarounds to obtain his usual medication. They told him there were no cheaper alternatives or generic medications available, they didn't contact OptumRx to request an exception on Cole's behalf, and they didn't ask Cole's doctor to request an exception for him, his parents contend. The lawsuit seeks unspecified damages. "The conduct of both OptumRx and Walgreens was deplorable," one of the family's attorneys, Michael Trunk, said in a statement. "The evidence in this case will show that both OptumRx and Walgreens put profits first, and are directly responsible for Cole's death." OptumRx spokespeople didn't immediately reply to Wednesday messages seeking comment. In a statement last April extending sympathy to the family, the company said that a review of Cole's claims showed that on the day he visited the pharmacy, he did buy a different asthma medication, generic Albuterol, for a $5 co-pay on Jan. 10 — a medication that it says he also obtained in October 2023. His case was handled "consistent with industry practice and the patient's insurance plan design," the company said. Trunk, though, said Wednesday that the $5 generic prescription Cole filled was for his rescue inhaler, not the Advair Diskus inhaler that he took daily. He said Cole was not able to fill his Advair Diskus prescription because it had suddenly become too expensive.
