Walgreens to no longer participate in CVS Caremark Plans

[wellwell]

Very interesting...

June 7 (Bloomberg) -- Walgreen Co., the largest U.S. drugstore chain, said it will no longer participate in new or renewed prescription drug plans awarded to CVS Caremark Corp.'s pharmacy benefit manager. CVS dropped the most in seven months.

The partnership isn't in the best interest of customers, pharmacists or shareholders, the Deerfield, Illinois-based company said today in a statement. Current agreements won't be affected. Eileen Howard Dunn, a spokeswoman for CVS, didn't immediately return a call seeking comment.

Walgreen, which operates more than 7,500 stores across the U.S., cited the unpredictability of reimbursement rates and a lack of communication over the transfer of prescription drug plans. The move may hurt CVS as the company strives to renegotiate agreements, according to Gabelli & Co.'s Jeff Jonas.

"The timing's opportunistic," said the analyst at Rye, New York-based Gabelli. "We're getting into the final selling season for 2011 drug plans, and this creates a lot of uncertainty and a lot disruption." Jonas said the move could prompt him to re- evaluate sales estimates for the companies.

CVS is the largest distributor of prescription drugs in the U.S. Last month, CVS said its business practices are under investigation by 24 states in a probe similar to one started by the U.S. Federal Trade Commission. The states are examining the relationship and practices of CVS and Caremark in the aftermath of their 2007 combination.

Walgreen fell $1.10, or 3.6 percent, to $29.74 at 9:34 a.m. in New York Stock Exchange composite trading. CVS, based in Woonsocket, Rhode Island, declined $3.08, or 9.1 percent, to $30.71. Earlier the shares dropped as low as $29.62, the most since Nov. 5.

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[aboveliquidice]

This has been developing now for the better part of a year... There is currently ongoing investigation into whether or not CVS/caremark business practices are illegal.

I'm not sure they are - but it certainly is an issue worth following.

Source link for FTC probe: LINK

 

[rxlove]

This is a big deal for us at Walgreens...CVS/Caremark manages a lot of insurance plans (esp. Part D plans) and the change will do a dent in our script volume. I suspect we'll have a lot of angry patients, too...

In the end, business is business. I'm glad that we aren't allowing CVS/Caremark to walk all over us, but I'm sad for the patients who are losing their ability to choose.

 

[Doctor M]

This is the first step to breaking up them up...FTC will rule in due time!

 

[bacillus1]

Walgreens also tried to not accept Medicaid in Delaware and Washington. Not sure how that went.

 

[MountainPharmD]

This is the first step to breaking up them up...FTC will rule in due time!

Its only a matter of time before the smack gets put down on CVS. However, everyday is another million dollars of profit in their pockets.

 

[jinga]

I hate CVS.

 

[kdt110]

I wouldn't be surprised if cvs and caremark break up in the next 3-5 years. It is causing too much headache for cvs!

 

[Got Em]

This is a big deal for us at Walgreens...CVS/Caremark manages a lot of insurance plans (esp. Part D plans) and the change will do a dent in our script volume. I suspect we'll have a lot of angry patients, too...

In the end, business is business. I'm glad that we aren't allowing CVS/Caremark to walk all over us, but I'm sad for the patients who are losing their ability to choose.

Part of this post is not really true. We will still honor existing patients with CRK, but will not accept new patients and will not accept patients when they are up for renewal. CRK is about 7% of Walgreens' business, but only about 1/3 of these insurances are renewed each year, so it seems like we'll be losing slightly 2.5% of our business, which in the long run, is not really that big of a deal...especially if the reimbursement rates are this horrible.

 

[Got Em]

BTW, after the statement was announced, CVS/Caremark's stock went down 7.3% and Walgreens' stock went down 1.8%, so it seems like it's affecting CVS/CRK a little bit more. I heard that Walgreens actually was the largest provider for them.

 

[xiphoid2010]

Business is business. It also boils down to the bottom line. I have no doubt that CVS/Carmark reimbursement sucks, add on top that doing business with them is like feeding the enemy, it doubly made it easy to for walgreens to end the relationship.

 

[BallerinaRx]

CVS responds that all current CVS Caremark PBM contracted plans will no longer be able to use Walgreens as their retail pharmacy after 30 days:

http://www.walletpop.com/blog/2010/06/09/the-cvs-walgreens-war-could-leave-you-the-victim/

Awesome, I just switched to Walgreens and my employer uses CVS Caremark PBM - now I have to walk twice as far to get to a CVS.

 

[IndustryPharmD]

I do not envy those who work at Walgreens in areas with high Caremark headcount... all those people will not read the notices their insurance sends them (because no one ever does) and will come to the pharmacy and complain, and then the pharmacists will have to spend a ton of time transferring all of their, and their families' prescriptions out... so much time will be wasted.

 

[Got Em]

CVS responds that all current CVS Caremark PBM contracted plans will no longer be able to use Walgreens as their retail pharmacy after 30 days:

http://www.walletpop.com/blog/2010/06/09/the-cvs-walgreens-war-could-leave-you-the-victim/

Awesome, I just switched to Walgreens and my employer uses CVS Caremark PBM - now I have to walk twice as far to get to a CVS.

You can actually go anywhere, but Walgreens. I think this will hurt CVS-CRK a lot more than Walgreens in the long run. We are their #1 provider and they have profited a great deal due to the low reimbursements that we're been receiving.

 

[genesis09]

Per Wags, they say Crk is about 7% of its total script volume.
I'm not really effected by this. At my store, maybe about 10 regulars have Caremark insurance.

 

[BallerinaRx]

You can actually go anywhere, but Walgreens. I think this will hurt CVS-CRK a lot more than Walgreens in the long run. We are their #1 provider and they have profited a great deal due to the low reimbursements that we're been receiving.

Yeah unfortunately I live in the city of Chicago where there's a Walgreens on every corner and CVS seems to be the next most prevalent pharmacy in my neighborhood. I might have to see if the Jewel near me has a pharmacy. I don't want to give CVS any more business.

 

[Momus]

http://www.reuters.com/article/idUS...ia_ow=t0:s0:a49:g43:r5:c0.040323:b34699368:z0

(Reuters) - CVS Caremark Corp (CVS.N) will remove Walgreen Co (WAG.N) from its pharmacy benefits management network in retaliation for Walgreen's decision to stop filling prescriptions for new CVS Caremark business.

Right back at you WAGS 😳 WAG will not be hurt as much because their PBM business is not as big as CVS/Caremark

Other chains will benefit from the volume increase WAG and CVS lose.

 

[Doctor M]

http://www.reuters.com/article/idUS...ia_ow=t0:s0:a49:g43:r5:c0.040323:b34699368:z0
Right back at you WAGS 😳 WAG will not be hurt as much because their PBM business is not as big as CVS/Caremark

Other chains will benefit from the volume increase WAG and CVS lose.

We are gonna try to market ourselves even more now...Hopefully we will see a slight increase in our script count! There are 2 CVS stores within 1 and 1/2 miles of our store 🙂 and 2 walgreens within 2 miles of us!

 

[Tinkerbell22]

You can actually go anywhere, but Walgreens. I think this will hurt CVS-CRK a lot more than Walgreens in the long run. We are their #1 provider and they have profited a great deal due to the low reimbursements that we're been receiving.

I'm confused about this...

I work at Publix and all of our customers who are hospital employees have Caremark insurance... for the past few weeks whenever we submit their claims they are sent to adjudication because apparently they are supposed to be using CVS from now on... the pharmacist has been telling them the situation, so I was under the impression that it was happening at every pharmacy that is not a CVS/Caremark.

 

[genesis09]

What CVS did has no baring on WHI plans. CVS is severing its insurance contracts with Walgreens Co as of next month.
For people with CVS Caremark insurance, if they go to a non-CVS pharmacy, they can get the go to CVS rejection.

 

[aboveliquidice]

I'm confused about this...

I work at Publix and all of our customers who are hospital employees have Caremark insurance... for the past few weeks whenever we submit their claims they are sent to adjudication because apparently they are supposed to be using CVS from now on... the pharmacist has been telling them the situation, so I was under the impression that it was happening at every pharmacy that is not a CVS/Caremark.

They are driving business to mailorder or CVS instore. When they get the rejection, the customer service rep kindly states that caremark won't cover said med to be filled in XXXX store any longer. I believe the first reject can be overridden. The second time around, the patient is given the options. 1 - fill in store at a CVS. 2 - get a new script and send it to mail order.

If this practice isnt contrary to FTC policies, I haven't any idea what is...

 

[MountainPharmD]

I'm confused about this...

I work at Publix and all of our customers who are hospital employees have Caremark insurance... for the past few weeks whenever we submit their claims they are sent to adjudication because apparently they are supposed to be using CVS from now on... the pharmacist has been telling them the situation, so I was under the impression that it was happening at every pharmacy that is not a CVS/Caremark.

It is happening and it is illegal. The government moves in two speeds...slow and stop. Once they get around to it CVS is going to get bitch slapped with fines and likely be forced to break up. I believe they know this, which is why they are doing something as blatantly illegal as this. They know the millions of customers and billions in profits they reap will pale in comparison to any fine the government will levy.

CVS –Destroying the profession everyway they can!

 

[Nupe954]

It is happening and it is illegal. The government moves in two speeds...slow and stop. Once they get around to it CVS is going to get bitch slapped with fines and likely be forced to break up. I believe they know this, which is why they are doing something as blatantly illegal as this. They know the millions of customers and billions in profits they reap will pale in comparison to any fine the government will levy.

CVS –Destroying the profession everyway they can!

Tis is true!

As a famous person once said "It starts from the top!" By that I mean CVS CEO resigned as soon as the heat was turned up in the kitchen. He knew the business practices of his company where unethical and it was only a matter of time. As a WAG employee I am glad we decided to take a stand, and with CVS's countermove (which was ridicously stupid considering we are the biggest provider in their network) it will be hard to dance around that subject during RFPs.

 

[Doctor M]

It is happening and it is illegal. The government moves in two speeds...slow and stop. Once they get around to it CVS is going to get bitch slapped with fines and likely be forced to break up. I believe they know this, which is why they are doing something as blatantly illegal as this. They know the millions of customers and billions in profits they reap will pale in comparison to any fine the government will levy.

CVS –Destroying the profession everyway they can!

im glad walgreens did this; hopefully they dont kiss and make up anytime soon...this could be a great opportunity to capitalize on getting new patients in the door...

 

[genesis09]

It was so slow this evening, so i spent some of the time going through the scripts in the ready bins and attaching letters to people with caremark insurance. I had only 15 ready rxs for people with crk insurance who did not already have the letter attached.

 

[rXmarksthespot]

Yeah unfortunately I live in the city of Chicago where there's a Walgreens on every corner and CVS seems to be the next most prevalent pharmacy in my neighborhood. I might have to see if the Jewel near me has a pharmacy. I don't want to give CVS any more business.

You can also get your meds by mail order