Tags: US | Walgreen | CVS | Split

CVS Caremark to Drop Walgreen From Pharmacy Network

Wednesday, 09 Jun 2010 10:05 AM

CVS Caremark Corp. said Wednesday it will end rival Walgreen Co.'s participation in its retail pharmacy network starting next month.

The Woonsocket, R.I., pharmacy benefits manager and drugstore retailer said it will stop participation 30 days from Wednesday or as required by law or contracts. It also will end Walgreen's participation in its Medicare Part D retail pharmacy network on Jan. 1.

Walgreen, based in Deerfield, Ill., is the largest U.S. drugstore chain based on locations and revenue, slightly ahead of CVS Caremark.

Walgreen said earlier this week that it will no longer do business with CVS Caremark's pharmacy benefits management operation because it wants better prices and objects to policies that drive customers to CVS stores.

CVS called that announcement a transparent attempt to raise reimbursement. It said it had negotiated in good faith with Walgreen for several months but Walgreen "failed to respond to efforts by CVS Caremark to continue business negotiations."

"We've seen Walgreens use this approach in the past, targeting employers, health insurers, government entities and other plan sponsors," said Per Lofberg, president of CVS Caremark's pharmacy benefits business, in a statement from the company. "We believe this approach is totally contrary to the needs of our clients who are all struggling to keep pharmacy health care affordable in today's challenging environment."

Walgreen said in a statement responding to the CVS announcement that it was "disappointed but not surprised" by the decision.

Walgreen shares fell 59 cents or 2 percent, to $30.02 in Wednesday morning trading, while CVS shares dropped 60 cents, or 1.9 percent, to $30.56.

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CVS Caremark Corp. said Wednesday it will end rival Walgreen Co.'s participation in its retail pharmacy network starting next month.The Woonsocket, R.I., pharmacy benefits manager and drugstore retailer said it will stop participation 30 days from Wednesday or as required...
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