WOONSOCKET – CVS Caremark Corp. has blasted a decision by Walgreen Co. to let patients in CVS-managed drug-benefit plans continue to get prescriptions filled at Walgreen even though the two companies plan to sever ties within a month.
CVS said the decision, first reported Monday by The Wall Street Journal, would violate its contact with Walgreen.
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Customers in pharmacy-benefit management (PBM) plans managed by CVS Caremark are “simply not interested in paying more for a single pharmacy chain in today’s difficult economy given the broad access to a wide network of pharmacies,” CVS told The Journal.
The argument is the latest episode in an ongoing spat between the two drugstore giants that began June 7 when Walgreen said it would stop accepting CVS-managed PBM plans. That led CVS two days later to say it would drop Walgreen stores from its provider network.
Separately, an executive at Medco Health Solutions Inc., another PBM company and a key CVS Caremark competitor, said his company was benefiting from the high-profile argument between the other two companies, Reuters reported Tuesday.
Glenn Taylor, Medco’s group president for key accounts, told a Goldman Sachs investor conference the dispute has helped his company, “only from the sense … that members [and] plans like stability and they don’t like instability.”
“When they think that their members could be disrupted, then they look for solutions to not have that service component disrupted,” Taylor said. “As long as they can provide it at a fair price, I think that will help the independent PBMs.”
He added that he expects CVS and Walgreen to resolve their disagreement soon, considering that billions of dollars worth of contracts and prescriptions are at stake.
CVS President and Chief Operating Officer Larry Merlo, who will succeed Thomas Ryan as the company’s CEO next year, declined to comment on the Walgreen dispute in an interview Monday with Providence Business News, citing his continuing role as head of the CVS/pharmacy retail division.
Speaking generally, though, Merlo said CVS was being targeted by its competitors because they were threatened by its efforts to lower costs through its integrated retail-PBM model and its MinuteClinic retail clinics.
“Someone described MinuteClinic as a ‘disruptor’ to health care, and I think that any time someone is introducing what can be considered to be disruptive products in the marketplace, there’s going to be some pushback somewhere,” Merlo told PBN. “But I don’t think we can lose sight of the value that those products are bringing by reducing costs and improving health outcomes.”
Additional information is available at cvscaremark.com.
