Humana's revised forecast stems from ``updated projections'' for the company's Medicare prescription drug plans, a stand-alone drug benefit sold to Americans age 65 and older. Humana has been racing UnitedHealth Group Inc., the largest seller of Medicare drug plans, to gain more members and has lowered some prices as a result, analysts said.
Humana, of Louisville, Kentucky, fell 26 percent, or $12.14, to $35.24 at 9:37 a.m. in New York Stock Exchange composite trading. It dropped 24 percent yesterday. The industry selloff that began two days ago continued as WellPoint, UnitedHealth and Aetna Inc. also declined. Investors yesterday cut $24 billion in value from the four biggest U.S. insurers.
``Humana priced their drug plan too low in order to gain market share, and we're seeing the result of that today,'' said Sheryl Skolnick, a CRT Capital Group analyst in Stamford, Connecticut, in a telephone interview. ``They are offering a plan with zero co-pays for a 90-day supply of generics through RightSource, their mail-order. And when you tell seniors something is free, they keep coming back again and again.''
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