Walgreens, Tricare contract dispute going to court

Government officials say military families and retirees have been confused by an awareness campaign launched by Walgreens as part of a contract dispute the pharmacy is having with Express Scripts, which manages Tricare’s prescription drug benefits. And now Express Scripts is firing back by taking Walgreens to court.

Filed Wednesday in U.S. District Court of the Northern District of Illinois, the suit alleges Walgreens breached its contract and staged an aggressive campaign targeted toward end users of both company’s services.

Walgreens sent out a letter to Tricare members this summer, which very directly provided the drugstore’s viewpoint regarding the dispute. More recently, the company has launched a website, ichoosewalgreens.com, to further get its side of the story before customers.

Military families and retirees have been confused by the outreach, many believing that Tricare has decided to no longer do business with Walgreens, says Patricia Kime of the Military Times.

Express Scripts spokesman Thom Gross issued a media statement concerning the lawsuit saying that “Walgreens has crossed a line and is not negotiating in good faith” and is instead hoping to “mislead and manipulate” customers using Express Scripts.

Walgreens flatly denies such charges, saying the company needed to do outreach to help their pharmacy customers understand what might happen if the impasse between the companies continues.

Tricare proper is not involved in the negotiations or the lawsuit, according to Rear Adm. Christine Hunter, deputy director of the Tricare Management Agency. She said her agency has received calls from concerned health care providers and wants patients to understand they have time to switch prescriptions, if it becomes necessary, and explore other options if they currently use Walgreens.

“There are 56,000 other pharmacies [in our network] where they can obtain prescriptions. They also have mail order and home delivery,” Hunter said.

In July Walgreens officials said they wouldn’t sign the proposed contract because they believe Express Scripts’ reimbursement rates fall below market rates, and the proposal gives Express Scripts an unfair advantage in future decisions.

Express Scripts officials say Walgreens’ payment rates are higher than industry standards and they believe the company should be more competitive.

Negotiations remain at a standstill and, if no agreement is reached, Walgreens will leave the Tricare pharmacy network on Jan. 1, 2012. It’s also worth noting that the two companies — Walgreens and Express Scripts — were involved in a similar standoff in 2008 and ultimately reached an agreement.

The bottom line from Hunter is that Tricare users shouldn’t “let that advertising, letter and Internet outreach campaign scare you.” Regardless of the ultimate outcome, she said, members will be able to have access to the medications they need.

“There is no emergency, and there is time for people to understand and consider their options.”

In addition to Tricare, some private insurers and government medical insurance programs utilize Express Scripts. If the companies are unable to reach agreement, all prescription plans managed by Express Scripts would no longer have Walgreens in the provider network.