Walgreen Says No to Doing Business with CVS Caremark
Walgreens announced yesterday it would no longer do business with CVS Caremark. The drugstore chain believes CVS’s pharmacy
benefits management (PBM) division is set up to drive down its profits while
pushing consumers to do business at CVS stores.
In particular, Walgreen took
issue with CVS Caremark’s Maintenance Choice
program. The drugstore chain said the CVS program forces many patients to either
use its mail order service or one of its pharmacies.
“In the three years
since the CVS Caremark merger, it has become increasingly clear to us that
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,” Kermit
Crawford, executive vice president of pharmacy for Walgreens, said in a press
CVS Caremark put the blame squarely back on its rival.”Today’s
announcement by Walgreens is nothing more than a transparent effort to raise
its reimbursement rates at the expense of plan sponsors and members and illustrates
an inability to adapt to the demands of the marketplace … The fact is our
clients, not retail pharmacies, dictate plan designs. Unfortunately, Walgreens
has a demonstrated pattern of publicly objecting to plan designs not to their
liking, such as mail based programs and other innovative programs that are
designed to reduce costs and meet client needs.”
The move, assuming the
two parties don’t arrive at a truce, could be costly for both companies.
which said it would handle current Caremark contracts but not new ones, gets
about seven percent of its annual revenue from doing business with its rival
based on an Associated Press report.
CVS Caremark could find it more
difficult to get companies to sign on for its PBM program if Walgreen was not
an option for filling prescriptions.
Discussion Question: What is your take on Walgreens’ decision to no longer
work with CVS Caremark’s pharmacy benefits manager business?
- Walgreen ending CVS Caremark network relationship – The Associated Press/The
- CVS Caremark Issues Statement in Response to Walgreens Unexpected Announcement
– CVS Caremark
- Walgreens Will Not Participate in Future CVS Caremark Pharmacy Network Plans
- Walgreen Cuts Future Ties With CVS Caremark-Administered Plans – The Wall