Thursday, March 28, 2024
Homelife and health insuranceFlu boosts drug store sales, but others take a hit

Flu boosts drug store sales, but others take a hit

This year's flu season is shaping up to be just as bad as expected, and that is driving consumers to drug stores for relief.

Walgreens Boots Alliance, the nation's largest pharmacy chain, saw a big boost in December in part because of flu-related purchases.

A woman receiving a flu vaccination in San Pablo, Calif.Getty Images

The retailer said sales in stores open at least 12 months rose 9.2 percent last month, as the flu drove spending higher in the so-called front of the store for things like tissues and over-the-counter medications.

Pharmacy sales also saw a boost due to greater demand for flu shots. Since the start of flu season, Walgreens said it has administered 7.6 million flu shots in its pharmacies, nearly a million more than this time a year ago.

Smaller rival Rite Aid also reported stronger sales due to the flu last month. Shares of Walgreens and CVS Health hit 52-week highs in late December, and Rite Aid shares have been trending upward. All three stocks were trading higher early Wednesday.

Will bad flu curb insurers?

The spread of the flu is also driving more patients to see their doctors. The Centers for Disease Control and Prevention said flu activity was at moderate to high levels in two-thirds of the nation at year's end, when flu-related hospitalization increased. That has analysts wondering whether fourth-quarter results for health insurers will be hurt by flu-related medical costs.

"While flu costs are seasonal and not indicative of underlying cost trends, they can have marginal impact on health plan medical costs and hospital volumes and can be challenging to disentangle from underlying trend estimates," wrote Brian Wright, health-care analyst at Sterne Agee.

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Wright estimated Medicaid players Centene and Wellcare Health Plans have the biggest exposure to states that reported the highest levels of severe flu activity at year-end, followed by Molina Healthcare.

For hospitals severe flu seasons result in higher volumes. Those with the greatest exposure to the hardest-hit flu regions include HCA Holdings, Community Health and Tenet Health Care, according to Wright.

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