CVS Caremark, Walgreen agree on drug-plan deal

CVS Caremark Corp. and Walgreen Co. have settled a dispute that threatened to change where millions of Americans fill prescriptions.

The companies, which said Friday they have agreed on a multiyear deal but did not disclose its terms, were battling over the amounts Caremark reimburses Walgreen for filling prescriptions for Caremark patients.

Walgreen and CVS do billions of dollars in business together every year, as Walgreen is the largest U.S. drugstore operator and CVS' Caremark is the third-largest prescription benefits manager.

It handled drug benefits for about 53 million people last year. At the same time, the CVS drugstore chain is Walgreen's top competitor.

Last week, the companies said they would end their relationship and Walgreen would stop accepting Caremark insurance.

Walgreen, based in Deerfield, Ill., with more than 7,500 stores across the country, wanted Caremark to pay it more for filling prescriptions, and it wanted Caremark to drop policies encouraging members to fill prescriptions at CVS' 7,000 stores. Including the Walgreen and CVS chains, Caremark's national network includes more than 64,000 pharmacies.

CVS Caremark, based in Woonsocket, R.I., said last week that Walgreen was demanding unreasonable rates that would drive up health care costs for both Caremark patients and benefit sponsors such as employers.

Pharmacy executives at Walgreen and CVS said in separate statements they are pleased with the new pact.

Roughly two-thirds of Walgreen's revenue comes from filling prescriptions.

Caremark negotiates contracts with employers to insure their workers' drug benefits, and it pays pharmacies to fill prescriptions. It makes money by negotiating volume discounts and pocketing some of those savings.- AP