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Healthcare heavyweights Walgreen, Express Scripts end squabble

July 19, 2012|By David Lazarus
  • Walgreen and Express Scripts have ended their long-running dispute over how much money should change hands when people fill prescriptions.
Walgreen and Express Scripts have ended their long-running dispute over… (Getty Images )

Walgreen drugstores and pharmacy benefit manager Express Scripts have made peace.

The two companies will once again allow people to fill prescriptions at the nation's largest pharmacy chain after a spat over money that began last summer. As of Jan. 1, people whose medical benefits were overseen by Express Scripts were forced to go elsewhere for their meds.

As I wrote in October, Walgreen believed it wasn't being fairly reimbursed for its prescription drugs. Express Scripts insisted it was offering fair value.

The dispute highlighted how easily consumers can find their healthcare choices limited when big companies bicker over who gets how much.

A pharmacy benefit manager, or PBM, is basically a middleman whose job is to keep prescription costs down for insurers and employers. It negotiates with drugstores for the best possible price.

Apparently Walgreen and Express Script have finally found that magic number.

The companies say in a statement that Walgreen will rejoin the network of pharmacies available to Express Scripts customers starting Sept. 15. Terms of the new contract weren't disclosed.

"We are in the business of providing a broad range of pharmacy, health and wellness services to help meet the needs of all of our customers," says Greg Wasson, president and chief executive of Walgreens. "I am pleased that Walgreens and Express Scripts have been able to reach an agreement that works for both parties and is consistent with our company's principles.

Sure, he's happy now. But before the deal was reached, Express Scripts had sued Walgreen, alleging that company was trying to steal away its customers.

So is this the end of such squabbling? Probably not. The PBM business is dominated by just three companies -- Express Scripts, CVS Caremark and OptumRX. Together they account for about three-quarters of all prescriptions filled by PBMs.

Chances are, they won't be shy about throwing their weight around in the future.

And once again, consumers will be stuck in the middle.

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