Gregory D. Wasson

And that’s why we built in a couple months pause here to go back and learn and understand before we roll out the next wave of stores.

Meredith Adler - Barclays Capital

Great, thank you very much.

Operator

And we’ll go next to Lisa Gill of JP Morgan.

Lisa Gill - JP Morgan

Thanks very much and good morning. I just had a couple of questions on the prescription side of your business. Greg, I think you made a comment that you were seeing better prescription volume than IMS. Could you maybe talk about where you think that’s coming from? Are you taking market share from others? And then secondly, when you made the comments around generics being better, is there a particular drug or do you think as the seniors are starting to fall into the doughnut hole, that’s what some of the driver is? And then thirdly, which would be around reimbursement, I know there continues to be pressure on the Medicare side but are you feeling any pressure in the commercial market?

Gregory D. Wasson

Maybe I’ll start with the macro level a little bit. I think that was your second question, Lisa. I think as an industry, certainly we are rounding some softer comps from last year, so I think we are seeing a little bit of that but I also think we are seeing what we call Medicare Part D maturity where, as more and more folks are becoming eligible for Part D, we are seeing more utilization from seniors. I also think that we are seeing, as I said, benefit design, more benefit designs that make generic drugs more affordable and therefore more people are staying compliant and using the prescription meds. As far as ourselves, I think we are seeing two or three things. Again, we’re rounding those softer comps as well so that’s some of it but we’re also benefiting from the Medicare Part D effect and we are gaining share in the senior market. I think we are also seeing a benefit from some of the weaker competition in the marketplace, obviously there’s several struggling. And I also think our PSC card is attracting new patients and we are pretty pleased with it.

As far as pressure on margins, as I said, I think we’ll continue to see, as we have in the past and have to manage that. I think what we need to do and will be doing is to help work with states and plans for ways to save costs that’s just not rate-related. I think there’s opportunity to still increase generic utilization. There are states out there that are not driving generic utilization to the rate that they can and there’s huge savings there as we work with them. So I think it’s really more spending time with plans with states to help them understand how they can deliver great savings through other means.

Lisa Gill - JP Morgan

And any thoughts around wanting to be bigger in your PBM, to help to try to drive some of those costs down through the programs that the PBM could offer?

Gregory D. Wasson

I think that as you’ve heard us say, we want to be a greater and greater provider of services and provide greater value to all plans out there, all payers. I think that we are seeing a strong interest in the employer solutions model that we have talked about, where large employers are looking for solutions to land health and wellness and pharmacies on their locations. I think that we are also seeing an opportunity for us to potentially be the back of the house, so to speak, for some of the plans that are out there. As you know, one of the large managed care organizations recently divested their PBM. I think there are folks out there that are looking at doing different things and I think everything from maybe outsourcing to provider services to potentially the entire PBM and I think we could, we are going to be looking to see if there are opportunities there for us.

Lisa Gill - JP Morgan

So are you interested if one of the managed care companies look to do something like that, is that something --

Gregory D. Wasson

We want to be a provider and so what we are really interested in is being able to provide mail service, retail prescriptions, and specialty services to payers across the country. That’s what I’m really interested in, Lisa.

Lisa Gill - JP Morgan