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ESI gets hit from both sides

WHAT IT MEANS AND WHY IT'S IMPORTANT — If this were a fist-fight, you might say Express Scripts just took the old "one-two" to the jaw — though in this case, the punches came from two different directions.

(THE NEWS: Walgreens makes case of value outside of Express Scripts in SEC filing. For the full story, click here)

Just as the FTC was calling out for a second request for information regarding ESI's proposed deal to buy Medco, Walgreens was taking its widely publicized battle with ESI public, submitting a seven-page white paper, entitled "The Value of Walgreens," as part of its 8K Securities Exchange Commission filing.

In a statement to Drug Store News, ESI argued that while it still is open to negotiating with Walgreens, "Walgreens would be the highest-cost pharmacy in our network with its current proposed rates," the company said. According to Walgreens, its acquisition of Duane Reade "confirmed our unit prices are highly competitive," and that "in most cases, Walgreens average cost per adjusted script will be within 2% of the average cost per script of the non-Walgreens retail pharmacy network."

ESI claimed it has 56,000 other pharmacies in its network, and doesn¹t need Walgreens to be able to offer its members convenient access. "It's a short drive or short walk in most instances," ESI noted. But according to Walgreens, "In many communities, Walgreens is the most convenient pharmacy or the only open pharmacy at the time a plan member needs help. For example, in Topeka, Kan., the nearest non-Walgreens 24-hour pharmacy is [more than] an hour drive. In Colorado Springs, Col., Walgreens is the only 24-hour pharmacy."

ESI said it already has been preparing its clients for life after its contract with Walgreens expires Jan. 1, 2012. Walgreens wants to make sure those clients understand their options — work directly with Walgreens, find a new PBM that has Walgreens in its network or force ESI to create a customized network with Walgreens in it if ESI wants to keep their business.

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