By: Lana Klein, co-founder,
4i
A recent billion-dollar forecasting error in Walgreen’s Medicare-related business has shocked the company and investors. The CFO was pressured to leave after he cut his 2016 pharmacy-unit earnings forecast from $8.5 billion to $7.4 billion. The company explained that it had not factored in a spike in the price of some generic drugs that it sells through its annual Medicare Part D contracts. While an error of this size draws the attention of the press and sends shock waves through the industry, Healthcare companies are regularly buffeted by armies of similar but smaller scale issues. Walgreen’s forecasting mistake
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