Inside This Issue - News
Walgreens goes on the offensive
August 8th, 2011
DEERFIELD, Ill. – Walgreen Co. has launched a letter-writing campaign to benefits consultants that outlines the reasons it likely won’t be part of Express Scripts Inc.’s pharmacy provider network after December 31.
Kermit Crawford, president of pharmacy, health and wellness at Walgreens, notes in the correspondence that the two sides remain far apart on key issues and urged the consultants advise their clients to plan accordingly.
“Walgreens reluctantly reached our decision regarding Express Scripts for several reasons,” says the letter. “Express Scripts proposed numerous changes to the existing agreement and insisted on being able unilaterally to define contract terms — including being able to ‘solely’ determine what does and does not constitute a brand and generic drug. Express Scripts also wanted to change the definition of the generic drug effective rate that would have resulted in changing the reimbursement for newly introduced single-source generic drugs.
“Express Scripts rejected Walgreens’ request to be informed in advance if the PBM [pharmacy benefit manager] intends to add or transfer a prescription drug plan to a different Express Scripts pharmacy network and provide patients with equal access to Walgreens retail pharmacies. Walgreens has no intention of determining plan design — but we do want predictability for our business if we give a preferred rate.”
The letter says Express Scripts proposed to cut reimbursement rates to “unacceptable levels that would be below the industry average cost” to provide each prescription.
“Express Scripts currently has very competitive rates from Walgreens, and we offered to hold rates for new contracts at the levels that would be in effect at year-end,” the letter states.
“We have already begun notifying our Express Scripts network patients that as of January 1, 2012, we will no longer be in the Express Scripts network. We will advise Medicare Part D patients that they have the option to select a network during open enrollment that includes Walgreens, and we expect that many will do so.”
In the letter, Crawford points out that Walgreens provides significant value to plan sponsors and their members, including better generic performance translating to increased savings for plan sponsors; more convenience and access, leading to fewer emergency room visits and other hospital costs; competitive unit prices validated by external benchmarks; savings from chronic medication management that cut pharmacy and medical costs; and broader health care value, such as access to over 26,000 pharmacists certified to provide immunizations.
“Plan sponsors whose pharmacy benefit management contracts are currently up for renewal may wish to select a PBM that includes Walgreens’ more than 7,700 pharmacies in their network,” Crawford states.
In a statement after Walgreens announced its plan to leave the pharmacy provider network, Express Scripts called the drug chain’s move “shocking” but expressed hope for an accord.
“On average, another pharmacy within the Express Scripts network is within one-half mile of a Walgreens pharmacy. Even without Walgreens in our network, we meet all client guarantees for access,” the PBM stated. “Express Scripts is optimistic that Walgreens will return to the table and negotiate in good faith toward a common goal of providing optimal care at a reasonable and competitive rate for tens of millions of Americans.”