Bear in mind, as you look at our numbers on cash flow, we’re investing approximately $1 billion of free cash flow in healthcare this year. And as we move forward into the future and it starts breaking even on an EBITDA basis, that $1 billion quickly becomes a cash flow generation tool. But we are getting into incremental and much more aggressive actions on capital and working capital in the short-term. Your second question then was on calendar ‘24. The reimbursement. Okay, sorry about that. Reimbursement as looking back over the last 18-months, the environment has been much more positive. I would say that we did comment and we’ve actually comment similar to that we said that this year, the current fiscal year is an 85%. This was a 15% step down on the previous year.
So that is the net reimbursement pressure on the P&L has improved. We actually don’t want to give too much comments on future negotiations, but we see much more productive discussions with payers and providers in general, because we’re bringing more value to the table, our ability to do medical adherence and other such activities and improve outcomes for payers has improved significantly over the last two years, and it’s starting to be more recognized in productive discussions. Maybe I’ll ask Rick Gates, our Head of Pharmacy to make some comments — further comments.
Rick Gates: Yes. You know, obviously, we’re in the middle of negotiations, so we can’t comment a lot going into ‘24 at this moment through Medicare Part D and through commercial contracts which are going on currently and into Q4. But, you know, just to reemphasize what James is saying, you know, we’re generally in line with expectations on reimbursement this year. We’re benefiting from conversations across U.S. Healthcare and Pharmacy as they’re looking at us as a holistic solution, within the healthcare ecosystem. And we’re continuously working on offsets for reimbursement pressure that we’re seeing through improved procurements, increased prescriptions, obviously, are important, ancillary services, but then also reducing cost to fill.
And I just want to reemphasize the other point that James said is that we are over performing or performing better in paper performance based contracts, which are obviously part of the reimbursement we get back as well. So I can’t comment on ‘24, but we are in line with expectations for ‘23 at this moment.
Operator: And your next question comes from the line of Ann Hynes from Mizuho Securities. Your line is open.
Ann Hynes: Great. Thanks. Good morning. So given healthcare is the main driver of growth next year. What do you think is the biggest risk embedded within that guidance? And then secondly, you commented in your prepared remarks that scripts will lower-than-expectations. Can you just decide for what is driven by maybe market weakness versus market share weakness versus maybe pharmacy hours not coming back to what your — what were in your expectations? Thanks.
Roz Brewer: Ann, thanks for that. question. I’m going to ask John to hit the first piece on healthcare, and then Rick and I will talk to you about the scripts business.
John Driscoll: Yes. Ann, I am really encouraged by the core growth across the portfolio. We’ve laid out exactly where the challenge is, which is in cost and profit opportunity. And we are laser focused on executing to unlocking that value. So look for us, as I mentioned in the earlier answer, to continue to unlock the embedded profitability of that part of the business. We see positive signs from all of the buyers. It’s our responsibility to grow, but also to grow and focus on profitable growth. And we will continue to, kind of, dig in there. And I’m confident that you will see consistent improved performance on that over time.
