Walgreens Will Not Participate in Future CVS Caremark Pharmacy Network Plans

Deerfield, Ill. June 2010 –  Walgreens said that it will not participate as a provider in any new and renewed prescription drug plans awarded after June 7 to CVS Caremark’s pharmacy benefit manager (PBM). The company said it had concluded that it was no longer in the best interests of its customers, pharmacists and shareholders to grow its future business with CVS Caremark. Current CVS Caremark plans in which Walgreens is already a pharmacy provider will not be affected.

“Walgreens participates in hundreds of pharmacy benefit networks, which serve an important function in the marketplace by providing comprehensive access to prescription services for patients in prescription drug plans across the country,” said Walgreens President and CEO Greg Wasson. “Unfortunately, as a result of CVS Caremark’s pharmacy benefit management practices toward Walgreens, it no longer makes good business sense for Walgreens to be part of their network for new and renewed plans. We will continue to participate in current CVS Caremark plans to provide continuity of care and service to our pharmacy patients.”

In its letter to CVS Caremark informing the company of its decision, Walgreens stated the following:

  • CVS Caremark’s promotion of prescription drug plan designs such as Maintenance Choice disrupts networks by requiring patients with chronic conditions in many plans to use CVS pharmacies or Caremark mail service facilities for their prescriptions instead of Walgreens. This limits patient choice and ends up separating patients from community pharmacists they know and trust at a Walgreens drugstore.
  • Currently, Walgreens receives no or little information when a CVS Caremark prescription drug plan is transferred to a different and differently-priced CVS Caremark pharmacy network, or when CVS Caremark acquires a new prescription drug plan as a client. Because of this, it is difficult to assess and decide in advance whether Walgreens should participate in new or altered CVS Caremark prescription drug plans.
  • The growing unpredictability of CVS Caremark reimbursement rates to Walgreens, and the fact that CVS Caremark’s payments for certain drugs often don’t reflect the market, has made it unacceptably difficult for Walgreens to reasonably and economically plan for and operate its business.

“In the three years since the CVS-Caremark merger, it has become increasingly clear to us that Caremark’s approach to Walgreens as a community pharmacy within CVS Caremark’s retail network has fundamentally changed, and we are no longer viewed as a valued community pharmacy within its PBM network,” said Kermit R. Crawford, Walgreens executive vice president of pharmacy. “In that time, we have come to feel that CVS Caremark’s pharmacy benefit management practices are inconsistent with the value we provide as the largest pharmacy provider in its network and the services we deliver to patients, employers and payers. These services include our trusted pharmacists and clinicians who stand ready to deliver critical health care advice, convenient locations with drive-thru pharmacies and 24-hour pharmacies that provide access to emergency medications. Consequently, we have reached a point where participation in future CVS Caremark plans no longer makes sense for us.”

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