NEW YORK (AP) — Walgreen Co. said Monday it is offering to continue filling prescriptions for military members, retirees, and their families under a new deal with Express Scripts Inc., but the pharmacy benefits manager said the offer was not good enough.
Express Scripts, one of the largest pharmacy benefits managers in the U.S., pays drugstores like Walgreen to fill prescriptions. A three-year contract between the companies expires Dec. 31, and they have not been able to negotiate a new deal. Walgreen and Express Scripts said in June they will stop doing business when the contract ends, meaning most people whose drug benefits are handled by Express Scripts won't be able to pick up prescriptions at the biggest chain of drugstores in the country.
Walgreen said Monday it has offered to continue filling prescriptions for members of the Defense Department's Tricare health care program, which is for military members, retirees, and families. Express Scripts handles the prescription drug benefit for Tricare. Walgreen said it is willing to guarantee it will match or beat the average cost of adjusted prescriptions filled at any other pharmacy in the Tricare network, which it said has about 6 million beneficiaries.
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Walgreen said it would be willing to have its expenses verified by a third party every quarter, and it would reimburse Tricare if its costs exceeded those of other pharmacies. Express Scripts has said Walgreen wants too much money to fill prescriptions, and it reiterated that view Monday.
"We have said all along that we would still welcome them in the network, but only at rates that are right for our clients," said company spokesman Brian Henry. "If they would have offered a good deal, we would have accepted it."
On Friday the companies reached a deal that will allow beneficiaries of Blue Cross and Blue Shield of Kansas City, Mo., to continue filling prescriptions at Walgreen stores. On Oct. 7, the companies agreed to continue doing business in Puerto Rico. Henry said those agreements don't signal a thaw in the relationship between Walgreen and Express Scripts. The companies have been negotiating in public and in private for months and have also taken their dispute to court. Henry said half a dozen Express Scripts clients have the right to tell the company they want a chain like Walgreen to be part of their network, and the Kansas City and Puerto Rico plans were among them.
Shares of Walgreen rose $1.21, or 3.7 percent, to $34.21 in midday trading. The Deerfield, Ill., company has said it will lose more than $5 billion in annual revenue if it stops filling prescriptions for Express Scripts, but that it would rather lose the revenue than do business on unacceptable terms.
Shares of Express Scripts, based in St. Louis, lost 24 cents to $39.94 in midday trading.
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