Walgreen Will No Longer Accept Four CVS Caremark Prescription Drug Plans

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Walgreen will no longer fill prescriptions for membersof four prescription drug plans offered by CVS Caremark because of "unreasonably lowand below-market" reimbursement rates, the Chicago Sun-Times reports (Guy, ChicagoSun-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 100,000affected plan members live in Illinois, Indiana, Michigan, Ohio and Wisconsin.

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

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

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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