« Health Plan Readmission Strategies: Contracting and Care Management Approaches | Main | Health Plan Readmission Strategies: Contracting and Care Management Approaches »

Walgreens and Express Scripts: The PBM-Pharmacy Feud

By Clive Riddle, March 16, 2012

Once upon a time, pharmacies and PBMs seemed like one happy family – experiencing minimal conflict in the health benefits arena while hospitals and health plans duked it out.  But as the marketplace pressures matured, a full blown family feud  - or pharmacy feud – has erupted in the form of the ongoing WalgreensExpress Scripts saga.

Walgreens walked away from their Express Scripts contract effective January 1st, due to an impasse over low reimbursement.  Stock analysts so far say the loss of volume does not bode well for Walgreens. But will Walgreens, and other major pharmacies for that matter attempt to turn the table through the merger & acquisition arena, consolidating to improve their contracting clout just as hospitals somewhat successfully did to health plans at the dawn of the new millennium.  Or is it that PBMs will out merge them?

Here’s what’s been expressed in this saga’s script during the past year:

Walgreen’s owned their own PBM, but decided to get out of the business (just as many hospitals shed their regional health plans before going into consolidation mode in the late 90’s and subsequently). Express Scripts was a strong suitor to purchase Walgreen’s PBM, but then Walgreens sold to Catalyst Rx in March last year.

Express Scripts and Medco Health Solutions entered into a Definitive Merger Agreement for the two PBM giants in July 2011, which is still undergoing regulatory scrutiny and thus under a veil of uncertainty.

Walgreens couldn’t re-negotiate a PBM contract with Express Scripts to their satisfaction for 2012 and beyond, so as of January 1st, they were no longer a participating pharmacy provider.  Walgreens touted its Prescription Savings Club was helping them keep Express Scripts patients, but Reuters reported earlier this month that Walgreen Co's comparable sales fell more than expected in February, the second month that the largest U.S. drugstore chain did not fill prescriptions for patients in the Express Scripts Inc.  pharmacy benefits network.  Reuters cited that the “number of prescriptions filled at Walgreen's comparable stores decreased 9.5 percent during the first 28 days of February after falling 8.6 percent in January. No longer being part of the Express Scripts pharmacy network slashed 10.7 percentage points from comparable prescriptions filled in February, Walgreen said. In February 2011, 12.6 percent of Walgreen's prescriptions were for Express Scripts.”

Adding fuel to this fire were various articles across the country, such as in the March 6th Oregonian, that Express Scripts users settle in with new pharmacies.  Then this week PCMA, the PBM association, released survey results that tout the headline: New Survey: Walgreens’ Customers Flock to Independent Pharmacies.

But the future may not be so gloomy for holders of Walgreens stock, despite a rash of analysts saying “sell” earlier this year.  Now a possible Rite Aid – Walgreens merger is rumored with the New York Times reporting that a major motive must be that “a merger could create a big new drug store company capable of pushing back against increasingly strong pharmacy benefit managers like Express Scripts.”

Stay tuned. 

Reader Comments (1)

I am looking for a Subject Matter Expert in PBM in detroit Mi for GalaxE Solutions. This is a full time opportunity. If interested please email me at

• Developing training curriculum and job aids
• Conducting training courses
• Managing a training environment
• Creating training videos
• Cross training and mentoring
• Works well in a fast-paced team
• Creating best practices for PBM
• Creating presentations
Qualifications Mandatory:
• Strong training delivery and communication skills
• Experience designing and developing training programs, curriculumn, CBT, etc
• Understand software development lifecycles (SDLC) and the Healthcare, PBM industry
• Excellent communication skills
• Readiness to travel worldwide
• Ability to be productive in a dynamic, fast-paced environment
Qualifications Desired:
• Proficient knowledge training tools and techniques
• Current technologies like Microsoft (MS Word, PowerPoint, Excel)

May 2, 2012 | Unregistered CommenterApryl Roberson

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>