August 9, 2022

Walgreens Plans to Drop Drug Partner

If the companies do not settle their dispute, people whose prescription benefits are handled by Express Scripts will not be able to get their prescriptions filled at the biggest drugstore chain in the United States, and Walgreens will give up about 7 percent of its annual revenue.

The announcement on Tuesday follows a similar contract fight a year ago between Walgreens and the CVS Caremark Corporation that was resolved less than two weeks after it became public.

The impasse with Express Scripts overshadowed news that Walgreens’ net income climbed 30 percent in its third fiscal quarter.

Walgreens’ stock fell $1.90, or 4.2 percent, to $43.28 a share. Express Scripts rose 20 cents to $54.99 a share.

Walgreens, which has spent months negotiating a new contract with Express Scripts, said it would stop participating in Express Scripts’ prescription plans starting Jan. 1.

Express Scripts is the second-largest pharmacy benefits manager in the United States, and it expects to handle at least 750 million prescription claims in 2011. Walgreens said about 90 million of those prescriptions would be filled at its stores.

Express Scripts, which is based in St. Louis, said that it had been preparing for Walgreens’ departure and that more than 50,000 other pharmacies participated in its network.

Walgreens, based in Deerfield, Ill., also reported that net income grew to $603 million, or 65 cents a share, during the three months ended May 31, up from $463 million, or 47 cents a share, a year earlier when its results were weighed down by costs associated with the health care reform law, its acquisition of the Duane Reade chain and reorganization costs.

Revenue climbed to $18.37 billion from $17.2 billion.

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