[StBernard] Walgreen preps customers for loss of Express Scripts

[Westley Annis]

Walgreen preps customers for loss of Express Scripts
By Phil Wahba and Lewis Krauskopf
January 4, 2012

Fri Dec 30, 2011 2:47pm EST (Reuters) - Walgreens said last Friday it will
increase staffing at its call centers and offer discounts as it tries to
hang onto customers once it stops filling prescriptions for Express Scripts
Inc. members.

Walgreens has been battling with the pharmacy benefits manager since June
21, 2011, when Walgreens said the companies could not agree on terms for a
new contract. The current contract expired on Saturday.

The top U.S. drugstore chain, which operates 7,810 locations, is offering
discounts in January on an annual membership fee and giving coupons to some
Express Scripts members to keep them from defecting to rivals such as CVS
Caremark Corp. and Rite Aid Corp.

Those chains, and others like Wal-Mart Stores Inc., have been courting
Walgreens customers. Last Thursday, Supervalu Inc.'s Jewel Osco chain said
it was beefing up its pharmacy services to welcome Express Scripts members
who will no longer be accepted at Walgreens.

Walgreens claimed that about 120 Express Scripts health plans, employers and
other clients have either switched PBMs or taken steps so that members could
maintain access to Walgreens' stores. Last week, it had said that number was
about 100.

But Express Scripts said only a handful of clients have actually made the
switch.

The PBM said it remained open to reaching an agreement with Walgreens, which
said it made a "serious attempt" in mid-December to patch up their
differences.

"We would love to have Walgreens in our network at rates and terms that are
right for our clients," Express Scripts spokesman Brian Henry said in
response to the Walgreens statement on Friday.

Henry said Express Scripts has more than 56,000 pharmacies in its network,
excluding Walgreens.

Last fiscal year, Express Scripts processed 88 million prescriptions filled
by Walgreens, representing $5.3 billion in Walgreens' sales. Walgreens said
in a regulatory filing on Thursday it would mitigate some of the expected
loss in business through cost-cutting.

The increased staffing at the company's call centers is aimed at helping
Express Scripts members find a way to still be able to fill prescriptions at
Walgreens.

(Reporting By Phil Wahba in New York, additional reporting by Lewis
Krauskopf; Editing by Gerald E. McCormick)