Walgreens announced this morning it will sever ties with PBM giant CVS Caremark.
The news came in an announcement from Walgreens that identified several reasons for the decision including pricing inconsistencies, movement of patients frm Walgreens to caremark’s mail order program, and other business practices that appeared to favor CVS over Walgreens.
While I have no inside information on this, it undoubtedly came after a series of escalating discussions between the two companies, the last of which may have been ultimatums from both parties.
While some may see this as the last step in a game of brinksmanship, Walgreens would not have made this decision lightly; the change pushes a lot of buyers out of their stores, buyers who also purchase toiletries electronics and other goods that make up the majority of Walgreens retail sales.
What does this mean for you?
If Caremark is the network used by your PBM, start looking. Walgreens’ actions may inspire smaller pharmacy chains to rethink their Caremark relationships.
Jun
7
This is a curious strategy by Walgreens. If I’m a member of a group plan with CVS Caremark as my PBM (which I am), and I fill my scripts at Walgreens (which I do), I’m not going into the HR office and demanding my company switch PBMs for our next effective date. I’m taking my scripts crosstown to Walmart, Kroger, Target or, ta-da, CVS.
Either the folks running Walgreens are stupid or negotiations were just so far gone they are went into damage-control mode so they have an explanation for the investors.