Health Care – Health Care Technology & Distribution: 2012 First

In first place for a third year running is Lisa Gill of J.P. Morgan. “Lisa is very close with management teams and yet is not afraid to challenge them when she thinks that their strategic direction does not make sense,” notes one ally. Other clients praise Gill’s responsiveness. “She is always accessible — I don’t know where she gets the energy,” says one. The 43-year-old analyst, who follows 15 stocks, is bullish on pharmacy benefit managers. “The PBM business model will benefit from the increase of pharmaceutical utilization by the aging baby boomer population and from generic-drug use, as profit margins are higher on these drugs,” Gill says. Among her top picks for 2012 is Woonsocket, Rhode Island–based CVS Caremark Corp., owing to its differentiated business model, which includes both a PBM and a retail distribution network. “CVS has also benefited from the dislocation in the marketplace,” she adds, citing the payment dispute between St. Louis–based Express Scripts Holding Co. and Walgreen Co. of Deerfield, Illinois; the disagreement lasted more than a year and was finally resolved in July. CVS’s stock gained 12.9 percent year-to-date through August, just ahead of the broad market’s 11.8 percent advance. Looking ahead, Gill is bullish on PBMs Catamaran Corp. of Lisle, Illinois, and Express Scripts.