Walgreen Will No Longer Accept Four CVS Caremark Prescription Drug Plans

Main Category: Health Insurance / Medical Insurance
Article Date: 04 Dec 2007 - 11:00 PDT

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Walgreen will no longer fill prescriptions for members of four prescription drug plans offered by CVS Caremark because of "unreasonably low and below-market" reimbursement rates, the Chicago Sun-Times reports (Guy, Chicago Sun-Times, 11/29). The move will affect members of plans managed for ArcelorMittal, Johnson Controls, Progressive Casualty Insurance and the Wisconsin Education Association Trust (Galante, Bloomberg/Providence Journal, 11/30). Most of the 100,000 affected plan members live in Illinois, Indiana, Michigan, Ohio and Wisconsin.

According to Walgreen officials, the company selected the four plans because they have the lowest reimbursement rates from CVS Caremark. Trent Taylor, president of Walgreens Health Services, said, "We can't continue accepting reimbursement rates that are drastically below market" (Manor, Chicago Tribune, 11/30). Walgreen said that CVS Caremark increased the reimbursement rate for a fifth plan but declined to provide the same increase in the rates for the four affected plans (Wall Street Journal, 11/30).

Taylor said that Walgreen will continue to seek an agreement with CVS Caremark on reimbursement rates for the four plans (Chicago Sun-Times, 11/29). In response to the move, CVS Caremark said, "We have repeatedly reached out to Walgreens to resolve the matter and regret that they have chosen to terminate their participation in the retail networks of the four clients targeted in the Midwest" (Wall Street Journal, 11/30). Analysts predict that the "kind of showdown with Walgreens likely will become more frequent as pharmacy benefit managers look for ways to squeeze savings out of the spiraling cost of health care while pharmacies try to preserve profits," according to the Tribune (Chicago Tribune, 11/30).

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