CVS Caremark removes Walgreens from PBM network

WOONSOCKET, R.I. Following an announcement that its pharmacy benefit management business no longer would be used by Walgreens, CVS Caremark said Wednesday morning that it would terminate Walgreens' participation in its retail pharmacy networks in 30 days.

CVS Caremark said the decision was based on Walgreens' recent actions -- ceasing its participation in future plans with CVS' PBM business -- which the chain said violated the terms of its existing agreements, and that Walgreens has failed to respond to efforts by CVS Caremark to continue business negotiations. In line with the announcement, CVS Caremark added that it will terminate Walgreens' participation in its Medicare Part D retail pharmacy networks effective Jan. 1, 2011.

"Our network of participating pharmacies is currently the largest ever maintained by our PBM business, with more than 64,000 participants, only 7,000 of which are Walgreens stores," said Tom Ryan, CVS Caremark chairman and CEO.

According to the retail pharmacy chain, when Walgreens is included in the CVS Caremark pharmacy network, 85.9% of members on a national basis have access to a network pharmacy within a 3-mi. radius of where they live. When Walgreens is excluded from the network, that figure changes to 85.7%, CVS said. In order to minimize patient disruption and provide network stability, CVS Caremark said its agreements with Walgreens and other retail pharmacies do not permit network participation on a selective basis.

"We regret any inconvenience this change may have on plan members who currently fill their prescriptions at Walgreens, but are confident that through our remaining valued network partners, we will continue to provide excellent geographic coverage for our clients and their members across the country," Ryan added. "We will continue to provide convenient and affordable pharmacy care to members, and we are committed to a smooth transition of affected members to other pharmacy providers in our networks."

Walgreens said Wednesday that while it was disappointed by CVS Caremark's action, the chain was not surprised. "In making our decision not to participate in any new and renewed plans by CVS Caremark, we sought to minimize any disruption to existing relationships between pharmacists and patients," Walgreens stated. "CVS Caremark’s move plainly contradicts its own statement on June 7 that their mission is to provide broad access and choice for consumers. Their patent disregard for patient choice and broad access reflected in [today’s] decision reinforces our conviction that it would not have been in the best interests of our patients, pharmacists or shareholders to grow our business with CVS Caremark. Regardless of CVS Caremark’s decision, we are confident of our ability to continue to grow our business as a provider in hundreds of other pharmacy benefit networks, and as a direct provider to employers."

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