This story is part of a reporting partnership that includes KQED, and Kaiser Health News.
If you’re heading into a Walgreens to pick up a prescription, you may first want to check the back of your insurance card. If it says Express Scripts, you can no longer fill your prescription at Walgreens or affiliates like Duane Reade under your insurance plan.
Express Scripts is one of the nation’s largest pharmacy benefit managers. These are companies that health insurers, employers and others hire to negotiate and track prices for drugs and to oversee prescription drug programs. Express Scripts’ clients include the mega-insurer WellPoint.
Express Scripts had been negotiating a new contract to keep Walgreens in its network. But “their rates and terms would be as much as 20 percent more,” according to Express Scripts spokesman Brian Henry. “Our clients aren’t willing to pay that premium for basically the same service you can get at many other thousands of our pharmacies.”
That’s a charge that Walgreens adamantly denies. “We did not propose any increase in our rates,” says Walgreen’s spokesman Michael Polzin. “So there would not be any significant savings to Express Scripts clients for excluding Walgreens from their network. So it’s really a situation of all pain and no gain for their clients.”
Health care experts are somewhat befuddled by the standoff. Sean Brandle, a pharmacy benefit expert at the Segal Company, a New York-based employer benefits firm, said that while tussles between pharmacy chains and pharmacy benefit managers are pretty typical, “at the end of it, normally what you expect is that some kind of deal is going to be struck,” he said. “But I guess in this instance, it looks like they were just too far apart.”
Brandle is “surprised” Walgreens would walk away from so many pharmacy customers and all that in-store foot traffic. According to Express Scripts, of the 750 million prescriptions it processed last year, about 90 million were filled at Walgreens.
Caught in the middle of this dispute is one of the nation’s largest health insurance companies, WellPoint, and millions of its customers, like San Francisco resident David Forer. There’s a Walgreens just down the street from his office, and he used to stop in weekly to pick up insulin for his daughter, who has Type 1 diabetes.
“They knew me on a first-name basis,” Forer said, adding, “They would ask how she was doing. And now I can’t go there anymore.”
Forer has switched his family’s prescriptions to a CVS pharmacy. But while CVS is a national chain, it doesn’t have nearly as many stores in San Francisco as Walgreens does, so it will be a “major inconvenience” to Forer.
WellPoint says nationwide, there’s another in-network pharmacy typically within a half -mile of a Walgreens. The insurer is trying to help its customers make the transition.
CVS, RiteAid, Safeway and others are advertising their willingness to fill Express Scripts prescriptions while Walgreens is offering incentives and coupons to stem the loss of customers to its competition. In Florida and other states, the company has announced that it will allow some customers with Express Scripts coverage to continue using its pharmacies. Sandy Anderson, a Tampa Walgreens pharmacist, says Express Scripts customers can enroll in Walgreens’ discount drug program: “The fee to sign up for that has been $20 for an individual and $35 for a family. But for the month of January were knocking that down to $5 for an individual and $10 for a family. And that can include pets as well. That savings club offers discounts on over 8,000 brand-name and generic medications.”
Pharmacy benefit expert Brandle notes there could be an upside to all the hassle. Brandle says Express Scripts should be able to negotiate steeper discounts with CVS and other pharmacies, since excluding Walgreens will mean more business for them.
WFSU’s Lynn Hatter and WBUR’ Martha Bebinger contributed to this story.