UnitedHealth Group (UNH)

Prescription Solutions second quarter revenues of $3.6 billion increased $383 million or 12 percent year-over-year, driven by strong growth in consumers served.

Second quarter earnings from operations grew $72 million or 77 percent year-over-year to $166 million. First quarter 2009 earnings trends continued, with increased profits driven by script volume growth, improved drug purchasing, steady gains in mail service drug fulfillment, and a continuing favorable mix shift to generic pharmaceuticals, which averaged nearly 69 percent of total volume in the quarter. These factors lifted Prescription Solutions second quarter operating margin to 4.7 percent.

Prescription Solutions first quarter revenues of $3.5 billion increased $333 million or 10 percent year-over-year, driven by strong growth in consumers served through Part D prescription drug plans.

First quarter earnings from operations grew $42 million or 43 percent year-over-year to $140 million. Increased profits were driven by script volume growth, improved drug purchasing, steady gains in mail service drug fulfillment, and a continuing favorable mix shift to generic pharmaceuticals. These factors lifted Prescription Solutions first quarter operating margin by 90 basis points to 4.0 percent.

During the quarter, Prescription Solutions received national recognition for its Drug Interaction Alert program. This program specifically targets dangerous drug interactions caused by the issuance of prescriptions for a patient by at least two different physicians. In an independent study, Drug Interaction Alert helped to resolve potentially dangerous drug-drug interactions for 40 percent of the study participants, reducing the risk of adverse drug reactions and improving participants’ safety and quality of life.

Prescription Solutions full year 2008 revenues of $12.6 billion decreased $676 million or 5 percent year- over-year and fourth quarter revenues of $3.1 billion decreased $194 million or 6 percent year-over-year. These decreases were due to the continuing market shift to lower-priced generic drugs and a reduction in the number of people served through Medicare Part D prescription drug plans from the re-assignment of dual-eligible enrollees in certain regions by CMS in 2008.

In 2008 Prescription Solutions grew the number of consumers served through unaffiliated benefit plans by 15 percent, or more than 400,000 people. The people served through these channels now represent 30 percent of Prescription Solutions 10.6 million consumers.

Full year 2008 earnings from operations of $363 million increased by $94 million or 35 percent year-over-year and fourth quarter earnings from operations grew $2 million or 3 percent year-over-year to $80 million. Increased profits were driven by steady gains in mail service drug fulfillment and by a continuing favorable mix shift to generic pharmaceuticals.

These trends also drove 90 basis points of full year 2008 margin improvement to 2.9 percent at Prescription Solutions, with fourth quarter operating margin increasing 20 basis points year-over-year to 2.6 percent. Generic usage exceeded 68 percent of prescriptions filled in the fourth quarter of 2008, an increase of more than 4 percentage points year-over-year.

Prescription Solutions third quarter revenues of $3.1 billion decreased $178 million or 5 percent year-over-year in the third quarter of 2008, due to the continuing shift to lower-priced generic drugs and a reduction in the number of people served through Medicare Part D prescription drug plans as a result of the re-assignment of Ovations dual-eligible enrollees in certain regions by CMS in 2008.

On a year-to-date basis, Prescription Solutions grew the number of consumers served through unaffiliated benefit plans by more than 400,000 people to 3.2 million people, representing 30 percent of Prescription Solutions 10.6 million consumers.

Third quarter earnings from operations grew $14 million or 18 percent year-over-year to $91 million. Increased profits were driven by steady gains in mail service drug fulfillment, which offers improved affordability and convenience for consumers, and by a continuing favorable mix shift to generic pharmaceuticals.

The Prescription Solutions third quarter operating margin increased 60 basis points year-over-year to 3.0 percent, driven by increased levels of generic utilization and mail service fulfillment.

Prescription Solutions second quarter revenues of $3.2 billion decreased $131 million or 4 percent year-over-year in the second quarter of 2008, due to a reduction in the number of people served through Medicare Part D prescription drug plans as a result of the re-assignment of dual-eligible enrollees in certain regions by CMS effective January 1, 2008, and the continuing favorable shift from name brand pharmaceuticals to lower-priced generic drugs.

Second quarter earnings from operations grew $29 million or 45 percent year-over-year to $94 million. Increased Prescription Solutions profits were driven by steady gains in mail service drug fulfillment, which offers improved affordability and convenience for consumers, and a continuing favorable mix shift to generic pharmaceuticals.

The Prescription Solutions second quarter operating margin reached 3.0 percent, increasing one percentage point year-over-year, driven again by strong generic utilization patterns and mail service volume.

Prescription Solutions revenues of $3.2 billion decreased $173 million or 5 percent year-over-year during the first quarter of 2008. This decrease was due to a reduction in the number of people served through Part D prescription drug plans by Ovations, due to the CMS re-assignment of dual-eligible enrollees, and a continuing shift from name brand pharmaceuticals to lower-price generic drugs.

First quarter earnings from operations grew $49 million or 100 percent year-over-year to $98 million. Increased Prescription Solutions profits were driven in part by significant gains in mail service drug fulfillment, which offers improved affordability and convenience for the consumer, and a continuing favorable mix shift to generic pharmaceuticals.

The Prescription Solutions first quarter operating margin reached 3.1 percent, more than doubling year-over-year and increasing 70 basis points from the fourth quarter, driven again by strong generic utilization patterns and mail service volume. Generic drug utilization increased 6 percentage points year-over-year to 66 percent in the first quarter of 2008.

On January 1, 2007, Prescription Solutions began providing prescription drug benefit services to approximately 4 million additional seniors on behalf of Ovations. Driven by this growth, Prescription Solutions revenues increased $9.2 billion or 224 percent for full year 2007 and $2.3 billion or 215 percent for fourth quarter 2007, reaching $13.2 billion and $3.3 billion for the respective periods. Because of the relationship between Ovations and Prescription Solutions, approximately $9 billion of the full year revenue growth is eliminated in the intercompany elimination process.

Full year earnings from operations grew $130 million or 94 percent to $269 million, with fourth quarter earnings from operations of $78 million increasing $37 million or 90 percent over comparable 2006 results. The Prescription Solutions full year operating margin of 2.0 percent declined 140 basis points year-over-year, reflecting the comparatively lower margin earned in the high volume Ovations Part D prescription drug service contract and, to a lesser extent, costs associated with positioning the business for continued strong growth. For similar reasons, the fourth quarter operating margin of 2.4 percent decreased 150 basis points year-over-year and was stable sequentially.