DEERFIELD, Ill., Oct. 17, 2011 - Walgreen Co. (NYSE: WAG) (NASDAQ: WAG) today said it has offered terms to Express Scripts, Inc. (NASDAQ: ESRX) that if accepted would allow Walgreens to continue serving the Department of Defense (DoD) Tricare pharmacy program in 2012 and produce savings for the program without disrupting beneficiaries’ choice of a network pharmacy provider. Walgreens also reiterated its earlier, rejected offer to contract separately with Express Scripts for Tricare from other Express Scripts commercial business to avoid any disruption to military families and retirees. Express Scripts has ignored or rejected all previous offers made by Walgreens and continues to refuse to negotiate a separate contract for the benefit of the Tricare program and its 6 million beneficiaries.
In its latest proposal to continue serving Tricare beneficiaries, Walgreens took the unprecedented step of offering Express Scripts an ironclad guarantee that Walgreens prices would match or beat the average costs per adjusted prescription of all other pharmacies in the Tricare network. Those costs would be compared on an apples-to-apples basis and verified by an objective third party each quarter. In its proposal, Walgreens also committed to reimbursing Tricare for any overage following the end of each quarterly review.
In June, Walgreens announced it was planning not to be part of Express Scripts pharmacy provider network beginning Jan. 1, 2012, due to contract renewal issues. Prior to and after that announcement, Walgreens repeatedly offered to lower its rates and contract separately with Express Scripts for Tricare in order to decrease costs and provide important savings to the DoD. Express Scripts ignored or rejected these offers.
Walgreens has gone a step further with its ironclad guarantee. In addition, under Walgreens proposal, in the event that Walgreens reaches an agreement with Express Scripts that included lower rates than those proposed for Tricare, then Tricare would have the option to switch to those rates. This most recent proposal of Walgreens would guarantee that no additional costs would be incurred by Express Scripts or the Tricare pharmacy program as a result of keeping Walgreens in its pharmacy network.
Over the past several weeks, Walgreens has heard from nearly 200,000 military beneficiaries who are concerned about not having access to Walgreens retail pharmacies as part of the Express Scripts provider network. Walgreens greatly values the relationship it has developed with the Tricare pharmacy program and proposed its price guarantee as part of its commitment to serving the country’s active and retired military men, women and their families, as it has done for more than 100 years.
Walgreens (www.walgreens.com) is the nation's largest drugstore chain with fiscal 2010 sales of $72 billion. The company operates 7,779 drugstores in all 50 states, the District of Columbia and Puerto Rico. Each day, Walgreens provides nearly 6 million customers the most convenient, multi-channel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice in communities across America. Walgreens scope of pharmacy services includes retail, specialty, infusion, medical facility and mail service, along with respiratory services. These services improve health outcomes and lower costs for payers including employers, managed care organizations, health systems, pharmacy benefit managers and the public sector. Take Care Health Systems is a Walgreens subsidiary that is the largest and most comprehensive manager of worksite health and wellness centers and in-store convenient care clinics, with more than 700 locations throughout the country.
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