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Walgreens and CVS Feud Continues and Now Could Affect Where Consumers Can Get Their Prescriptions

Posted Jun 10 2010 6:21am

This is the next level in the dispute over money in healthcare, pharmacy battles, as if not being able to choose the doctor you want was not enough now we have this and with some employer benefit plans this is what we can expect, more battles.  CVS has one item that Walgreens doesn’t have and that is Caremark, in other words a mail order pharmacy benefit manager.  There are several others out there such as Medco that are independent of the retail operations. image

So if employers thought it was a hassle with negotiating health insurance benefits, now we have this entering the picture and a portion of this is driven by the affiliations being created by insurance companies too.  They want to keep the cost down on what we pay for drugs with their contracts.  As I posted earlier this week, Walgreens has an agreement where their pharmacists now can earn pay for performance money from United Healthcare if they are successful with enrolling you in their sort of wellness program and United is mining claim data to find those who have a “potential” risk of developing diabetes.  What’s going to be the move with CVS to counter this one?

UnitedHealthCare To Use Data Mining Algorithms On Claim Data To Look For Those At “Risk” of Developing Diabetes – Walgreens and the YMCA Benefit With Pay for Performance Dollars to Promote and Supply The Tools

In addition Walgreens is now looking to sell alcohol at all their stores and is in the process of getting licenses.  Booze makes profits.  Walgreens is working with AARP with their fleet of buses for free screenings to again put them in position to counsel you once more perhaps with information gathered, along with the United Healthcare data information. 

Both companies want to be involved in being your “genetic benefit manager” by having your DNA sequenced and also answering counseling.  Also in the news today was the acquisition of Eclipsys by Allscripts and CVS is working to put the software in place to work with Allscripts and getting rid of their present in-house e-prescribing software.  

The article also states the FTC is investigating CVS but there was little information given.  Both retail chains have retail clinics. 

In short this battle revolves around costs and contracts, just like the health insurance/hospital/physician coverage we have to battle and figure out.  BD image

A fight has broken out between the nation’s biggest drugstore chains, Walgreen and CVS Caremark, potentially affecting where millions of consumers can fill their prescriptions .

On Monday, Walgreen, which operates about 7,500 drugstores across the country, announced it would not participate as a prescription drug provider for customers in new drug benefit plans administered by CVS Caremark.

CVS Caremark, besides operating more than 7,000 of its own drugstores, is also a leading provider of prescription drug benefit plans that many employers offer workers and their dependents.

Mr. Kaplan said he was working with employers to determine how many of their workers might be affected if they were forced to stop using Walgreen under their plans.

In certain companies, they say, as many as 20 to 30 percent of employees enrolled in plans administered by CVS Caremark are filling their prescriptions at Walgreen. For those corporations, “it is significant,” said David Dross, an executive for the consultant Mercer who advises companies on pharmacy benefits.

Besides battling over drugstore customers, Walgreen and CVS Caremark compete to a lesser extent in providing employee drug benefit plans, although CVS Caremark is a much bigger player in that field.

The two companies “are effectively choosing to be direct competitors in administering plan benefits as well as prescription drugs,” said George Hill, an analyst with Leerink Swann.

The F.T.C. confirmed Wednesday that it was investigating CVS Caremark, but Richard A. Feinstein, the director of the agency’s bureau of competition said the commission would not comment on the subject of the probe.

Consultants and analysts say it is unclear whether the pharmacy benefit business will move toward a business model in which patients will no longer be able to fill their prescriptions at every drugstore but be forced to go to a select group of retailers.

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