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Walgreens Plans to Drop Express Scripts

DEERFIELD, Ill. — Walgreens said Tuesday that after several months of negotiations it has failed to reach a contract agreement with pharmacy benefit manager Express Scripts, and as a result the drug chain will drop the Express Scripts network as of Dec. 31, 2011.

At issue in the negotiations were clear terms of the agreement and unacceptable reimbursement rates that Walgreens said was below the industry average cost especially for Department of Defense Tricare program beneficiaries that Express Scripts manages.

“Walgreens is committed to providing quality, convenient and cost-effective pharmacy services to our patients, but we cannot continue to deliver these services under the terms and rates Express Scripts offered. As the largest retail provider in their pharmacy network, we were surprised by Express Scripts’ ultimate stance during our talks, which made it clear to us that they no longer had an interest in continuing a meaningful relationship,” stated Walgreens President and Chief Executive Officer Greg Wasson, in a press release.

Last year Walgreens threaten to pull out of CVS Caremark network for new or renewed plans for related reasons, but that dispute was quickly settled.

Express Scripts processes approximately 90 million prescriptions that are expected to be filled by Walgreens in fiscal 2011, representing approximately $5.3 billion in annual sales, according to the press statement. The Express Scripts’ network would no longer include Walgreens 7,700 pharmacies nationwide, including Walgreens more than 250 Duane Reade pharmacies in the New York City area.