News from Texas Pharmacy Business Council

As of yesterday, Walgreens will no longer participate in new or renewed CVS Caremark prescription drug plans. If Walgreens stands by this decision, it will drop all Caremark-managed prescription plans within three years.

Among the reasons cited is that Caremark does not provide enough information for Walgreens to decide if it makes financial sense to participate in the plan. Walgreens' news release specifically called out CVS Caremark's Maintenance Choice plan that requires patients in many plans to use CVS retail stores or Caremark mail order for maintenance medications.

This announcement follows one from CVS Caremark's Chairman and CEO Tom Ryan speaking at an investor conference last week that it plans to acquire 200 independent pharmacies a year. "It's tough for them to compete," he said.

Really?

The National Community Pharmacists Association is making certain Ryan's remarks are brought to the attention of Senate staffers and others working on an antitrust oversight hearing where the FTC will testify this week, according to NCPA Vice President and CEO Bruce Roberts, RPh. "We fully anticipate that the FTC will consider this aspect of CVS Caremark's business practices in its ongoing investigation of the chain/PBM/mail order conglomerate," he said.

Walgreens says CVS Caremark plans represent 7 percent of its business, but is willing to take the hit. Walgreens is the largest U.S. drugstore chain in terms of locations and revenue, slightly ahead of CVS Caremark. With Walgreens announcement, CVS Caremark stock slid more than 8 percent Monday.

CVS Caremark issued its own news release saying "we believe a public relations strategy that threatens network withdrawal is not a proper way to resolve business issues and is not in the best interests of patient care."

The comic relief for this battle of the titans is an advertising campaign by another PBM, Medco. It launched a business-to-consumer multimillion dollar advertising campaign featuring Dr. Obvious, PhD, "the world's foremost expert on the Incredibly Apparent." Medco hopes to pull in mail order business from other PBMs.

Stay tuned!

Richard E. Beck, RPh
Executive Director, Texas Pharmacy Business Council