Walmart to exit some CVS Caremark pharmacy networks amid reimbursement battle
CVS Caremark's commercial and managed Medicaid customers soon may no longer be able to fill prescriptions at Walmart drugstores amid a dispute between the two pharmacy giants over pricing.
CVS Caremark, the pharmacy benefit management arm of pharmacy chain CVS Health, said Walmart demanded reimbursement increases that CVS could not agree to, and as a result Walmart is choosing to leave certain Caremark networks.
But in a statement, Walmart suggested that CVS, which is in the process of acquiring health insurer Aetna, is abusing its "unregulated power" to direct members on where to fill prescriptions.
CVS said it has requested that Walmart remain in-network until April 30. The contract dispute does not affect Walmart's participation in CVS' Medicare Part D pharmacy network. Walmart's Sam's Club stores also remain in CVS' network.
CVS said Walmart's exit from the network will not have a material impact on its 2019 financial results because less than 5% of the affected members use Walmart exclusively to fill their prescriptions. Barclays analyst Steve Valiquette estimated in a research note that CVS has 21 million managed Medicaid customers and 31 million commercial customers.
"At a time when everyone is working hard to find ways to reduce healthcare costs, Walmart's requested rates would ultimately result in higher costs for our clients and consumers," CVS Caremark President Derica Rice said in a statement. "While we have enjoyed a long relationship with Walmart as a low cost provider in our broad national networks, based on our commitment to helping our clients and consumers manage rising pharmacy costs, we simply could not agree to their recent demands for an increase in reimbursement."
Walmart said that it is committed to securing value for its customers, not the middle man, and is focused on continuing discussions with CVS.
"This issue underscores the problems that can arise when a PBM can exert their unregulated power to direct members on where to fill their scripts, disrupting patients' healthcare," the company said in its statement. "Walmart is standing up to CVS's behaviors that are putting pressure on pharmacies and disrupting patient care."
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