
Walgreens and Express Scripts Mend Rift
The country's largest pharmacy chain and its largest pharmacy benefit manager have come to a new agreement, which will go into effect on September 15.
The country’s largest pharmacy chain and its largest pharmacy benefit manager have come to a new agreement, which will go into effect on September 15.
Walgreens and Express Scripts have settled a
The companies had stopped doing business with each other on January 1,2012, due to an inability to agree to a new contract. At the time, Walgreens claimed that Express Scripts offered to pay too little in drug dispensing fees, and Express Scripts claimed that Walgreens demanded to be paid more than the company was paying other pharmacies.
Express Scripts customers filled 88 million prescriptions at Walgreens pharmacies in 2011, more than 10% of the 819 million prescriptions dispensed by the chain that year. Since the companies’ former contract lapsed, Walgreens sales have steadily fallen as have its quarterly profits. Express Scripts, by contrast, reported in May that it had held onto 97% of its clients, despite the departure of Walgreens from its network.
“I am pleased that Walgreens and Express Scripts have been able to reach an agreement that works for both parties and is consistent with our company's principles,” said Greg Wasson, president and CEO of Walgreens, in a
The companies did not announce the terms of their agreement, but experts surmised that Walgreens made greater concessions given that its business had been affected far more seriously by the contract lapse. Pressure on Walgreens to make a deal was intensified by
Walgreens will still face a challenge in winning back the customers it has lost to competing pharmacy chains such as CVS and Rite Aid. CVS, which picked up most of Walgreens' lost business, has stated that it expects to hold onto half the business it has picked up from Walgreens since late 2011.
Representatives of community pharmacists pointed to the dispute as evidence that PBMs such as Express Scripts have far too much market power. “[T]his long-running dispute is emblematic of the uneven PBM/pharmacy ‘relationship,’” said National Community Pharmacists Association CEO B. Douglas Hoey, RPh, MBA, in a
Previous Pharmacy Times coverage of Walgreens and Express Scripts:
- Walgreens, Express Scripts Part Ways
- FTC Approves Express Scripts-Medco Merger
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