CVS Caremark and Walgreen end pharmacy network

CVS Caremark Corp. said Wednesday it will end rival Walgreen Co.'s participation in its retail pharmacy network starting in a month.

The move would mean people whose prescription drug benefits are handled by Caremark would not be able to be reimbursed for prescriptions filled at Walgreen pharmacies. Walgreen said it expects most of its 7,500 stores to be out of Caremark's commercial network in 30 days. Some Walgreen stores won't be cut off as quickly because of state laws or client contracts.

Both chains have dozens of locations on Long Island.

The Woonsocket, R.I., pharmacy benefits manager also said it will end Walgreen's participation in its Medicare Part D retail pharmacy network on Jan. 1.

Walgreen, based in Deerfield, Ill., the largest U.S. drugstore chain, is slightly ahead of CVS Caremark in revenue. Caremark negotiates contracts with employers and handles their health plans' drug benefits, paying pharmacies to fill prescriptions.

Walgreen wants to be paid more for filling prescriptions, while Caremark makes money by reducing costs for plan members and sponsors by negotiating volume discounts.

Analysts said Caremark's biggest rivals, Medco Health Solutions Inc. and Express Scripts Inc., will get more business from clients who decide not to participate in a network that excludes the biggest drugstore chain in the country.

Walgreen chief executive Greg Wasson told Bloomberg News Wednesday his company can make up for the loss of business by expanding corporate health care clinics and adjusting costs.