Walgreens and Express Scripts Resolve Contract Dispute

by U.S. Medicine

July 21, 2012

WASHINGTON—Walgreens and Express Scripts, the company that manages TRICARE’s pharmacy benefit, have resolved their contract dispute. The new agreement will bring Walgreens back into the Express Scripts pharmacy network.

“We are happy to include Walgreens in our broadest network of pharmacies and we are pleased to reach an agreement to do so,” George Paz, chairman and CEO of Express Scripts said in a statement.

What this means for TRICARE beneficiaries, however, was not immediately clear. In a statement TRICARE said “the impact on TRICARE of a new retail pharmacy agreement between Express Scripts, Inc., (ESI) and Walgreens pharmacy has not yet been determined.”

“Specific details have not been released, but the new agreement does not go into effect until Sept. 15, 2012.” TRICARE officials said in a statement. “TRICARE beneficiaries are currently served by military pharmacies, home delivery and a robust national retail network of over 56,000 pharmacies.”

The dispute meant that beneficiaries could no longer fill their TRICARE prescriptions at Walgreens pharmacies after Dec. 31, 2011 without paying higher out-of-pocket costs. Beneficiaries who used Walgreens could instead opt to use TRICARE’s home delivery service or use other pharmacies within the network.

Earlier this year, TRICARE Chief of Pharmaceutical Operation Rear Adm. Thomas McGinnis, told U.S. Medicine that the departure of Walgreens may have been one factor that accounted for the increase in beneficiaries who used TRICARE’s Pharmacy Home Delivery Program late last year. TRICARE officials would like to see more beneficiaries using this option because it is the least expensive point of service to fill prescriptions when beneficiaries are not using their local military pharmacy.

In 2011, he said the mail-order pharmacy was filling just more than 1 million prescriptions a month and that held steady throughout most of 2011. In October, however, that number jumped to 1,150,000 prescriptions and continued its increase to about 1.2 million in November and to almost 1.25 million prescriptions in December.


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