The CVS-Walgreens war could leave you the victim

Walgreens, CVS fight for control of prescription businessWalgreens and CVS pharmacies are engaged in a war, and the loser could be you. If your pharmacy benefit is managed by CVS Caremark Corp. you could soon lose the option of having your prescriptions filled at a Walgreens pharmacy.

Background: CVS is not just a chain of pharmacies. One of its businesses is CVS Caremark Corp. which handles the prescription-filling part of your employer's health care program. It offers you a huge selection of pharmacies you can use, as well as a mail-order option. Because health plans want to offer as wide a selection of outlets as possible, CVS Caremark has included the 7,500 Walgreen stores in its network.However, according to Walgreens, CVS has been offering discounts for those who fill prescriptions at CVS pharmacies or through the mail. Walgreens believes this is unfair, and on June 7, announced that it would no longer fill prescriptions for new patients in the CVS Caremark program.

In response, on June 9 CVS announced that it is throwing Walgreens out of the system altogether within a month. Now, not only will new Caremark insureds be unable to fill prescriptions at Walgreens; those already accustomed to doing so will be turned away, too.

CVS Caremark's President Per Lofberg claims that "Walgreens' announcement was nothing more than a transparent attempt to try to raise the pharmacy reimbursement rates it receives from CVS Caremark."

According to CVS, and consistent with the propensity for the two chains to build stores adjacent to one another, the percentage of customers with a network pharmacy within three miles of their home will only drop from 85.9% to 85.7% when Walgreens is dumped. Caremark claims 64,000 pharmacies at the moment, so the loss of 7,500 will leave 56,500 in the network.

These two need one another, though; Walgreens wants the business, since, according to the Wall Street Journal, around 7% of its sales are through the Caremark program. Caremark needs a hefty network of pharmacies in order to sell its services to health care providers at profitable rates. Current health care plan customers could also react very negatively to the loss of Walgreens, which could pressure Caremark to reconsider its decision.

Look for the grudge match to end in a draw, hopefully one that won't drive up the price of your meds. We hope that bell rings soon, before Walgreens customers are forced to seek a new pharmacy.
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