Walgreens Boots Alliance, Inc. (NASDAQ:WBA) Q1 2024 Earnings Call Transcript

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Stephanie Davis: Hey, guys. Congrats on the quarter and thanks for taking my question. Tim, I’ve got one last one on the cost plus model, just given your background in PBM and payor world. I’d be curious about your perspective on market share opportunities in this model. Is it status quo given it’s a line of one of your peers? Or is there a way to structure those to increase relative attractiveness or kind of gain some share as well?

Tim Wentworth: Sure. I appreciate the question. The way that we view every opportunity is how do we gain share with it. What I like is competing on unit price is a fairly straightforward exercise, and we continue to do that. Competing on the underlying cost to deliver the basic service is something again that we understand and live with. Hard to differentiate on those two. We will always be the low-cost provider. That’s one of the goals that we have and we are driving toward in our pharmacy business. But what I really like is the models that are being discussed and evaluated, and I think being pulled into the market, will allow differentiation on how well you leverage other assets and what assets you have. And in that respect, we’ve got 123 year head start on some folks as it relates to building out a trusted brand that patients will respond to.

I’m really compelled by the kind of response that we are able to get on behalf of payors, for example, in our Walgreens Health business, when we use our brand and have our pharmacists call a patient and suggest to them, on behalf of one of our plans, that a flu shot would be a good idea for a Medicare Advantage patient, or that perhaps complete — coming to the store and getting a Cologuard test and actually completing it and showing that we can get 50% plus response rates, even with something as challenging as a Cologuard test, to me that shows the kind of thing that we can do better than anybody that will differentiate us as these contracts with payors broaden out from pure unit cost. And so I feel really, really good about where we sit as an ability to do that to gain access to patients and, therefore, gain share.

Operator: Thank you. I will now turn the call over to Tim Wentworth, Chief Executive Officer, for closing remarks.

Tim Wentworth: Great. Thank you. So, in summary, and thanks for dialing in. We are pleased with our first quarter results, but we recognize we have a lot of work to do. It is still early. The market continues to be, particularly for retailers, challenging. I think we’re responding really very well. And we have a very supportive Board. You’ve seen the changes we’ve already been supported to make, and we have additional things that we are looking to do. We are on a path, but we are nowhere near the even the halfway point of the kind of things that we believe we can do long term to build a really powerful health services company on the back of and leveraging an excellent community asset that today we call a retail pharmacy. And so from that standpoint, the exciting thing for me is not only that we are on that path and that the results so far have been what we would have hoped for despite being very challenging and having to make some very, very difficult decisions.

But to me, the thing that I go home and get excited about every day is, after we talk to payors and we talk to the marketplace, we talk to pharma, and we find out the level of need and interest they have in Walgreens being a preferred partner. And I think over the coming quarters, we will be able to give you greater clarity as it relates to what that’s going to look like in our future and we look forward to doing that. Thanks very much.

Operator: This concludes today’s conference call. Thank you for your participation and you may now disconnect.

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