Coverage: Walmart threatens to leave CVS over costs
CVS Health Corp. is battling Walmart Inc. over the cost of filling prescriptions, a clash that could result in a split between the retail behemoth and the health-care giant.
Anna Wilde Matthews and Sarah Nassauer of The Wall Street Journal had the story:
Walmart is expected to leave CVS Caremark pharmacy networks over the dispute, a split that could occur as soon as early February, though CVS said it has asked for an extension through April 30. The two sides could also still end up hammering out a deal, despite the current public hostilities.
Different versions of how the dispute played out quickly emerged.
CVS Caremark, the pharmacy-benefits unit of CVS Health, said Monday that Walmart is seeking an increase in what the retailer gets paid for prescriptions, which would “ultimately result in higher costs for our clients and consumers.” CVS Caremark, which is separate from CVS’s retail drugstores, reimburses pharmacies when shoppers with CVS Caremark prescription coverage buy medicine.
ut a person familiar with Walmart’s position said Walmart didn’t ask CVS to increase the amount it pays the retailer when shoppers fill a prescription. Walmart asked CVS to maintain rates at current levels, said this person. In response, a CVS spokesman pointed to the company’s earlier statement.
Amelia Lucas of CNBC.com reported that CVS said a split would not materially impact its financial results:
Anyone with CVS-administered drug benefits and Medicaid enrollees with CVS drug coverage will be affected if the split happens, CVS said Tuesday. That means prescriptions filled at a Walmart pharmacy might not be eligible for coverage by their drug plans.
Walmart is one of the largest pharmacy chains in the United States with about 4,600 locations, but CVS said that the matter will not considerably impact its financial results. Less than 5 percent of affected CVS Caremark members use only Walmart to fill their prescriptions, CVS said.
Walmart spokeswoman Marilee McInnis said in a statement that the company is “disappointed CVS chose not to come to a resolution in a way that is beneficial to their members who are also our customers.” McInnis also said that the retailer wants to pass along savings to their customers, not a middle man.
Marty Schladen of The Columbus Dispatch reported that the news comes at a difficult time for CVS:
The news comes at a difficult time for CVS, which is trying to convince a federal judge that a merger with insurance giant Aetna won’t put the company in a position to engage in anti-competitive practices.
As a pharmacy benefit manager, CVS Caremark represents health plans, negotiating rebates with drug manufacturers and reimbursing retail pharmacies for the drugs they dispense. But many have questioned how CVS could fairly control reimbursements to retail pharmacies with whom CVS is in direct competition as the nation’s No. 1 pharmacy retailer.
For the past year, The Dispatch has documented Ohio independent pharmacists’ complaints that CVS cut reimbursements below their costs and then sent letters offering to buy their pharmacies. The paper also has reported that CVS Caremark and other PBMs have disrupted care for cancer patients by forcing them out of their clinics’ pharmacies to get their expensive cancer drugs from the PBMs’ own mail-order outlets. In addition, The Dispatch has reported how the Ohio Department of Health requires people who receive federal assistance to get their HIV drugs from CVS even though CVS in 2017 potentially exposed the HIV-positive status of thousands in a mailing.