Visit the Express Scripts website press room and you won’t find an announcement about the decision by Walgreen’s to stop filling prescriptions for the pharmacy provider network based in North St. Louis County. You will find the news on the website for the national drug store chain, based in the Chicago area.
This quote from a Walgreens press release points to a breakdown where many contract negotiations often come to an impasse: money.
“Walgreens is committed to providing quality, convenient and cost-effective pharmacy services to our patients, but we cannot continue to deliver these services under the terms and rates Express Scripts offered. As the largest retail provider in their pharmacy network, we were surprised by Express Scripts’ ultimate stance during our talks, which made it clear to us that they no longer had an interest in continuing a meaningful relationship.”
Quoted in the St. Louis Post-Dispatch, the Express Scripts CEO George Paz said:
“It is shocking to us that Walgreens would back away from the table with six months to go in the current agreement, especially considering that negotiations are part of the normal course of business.”
More on the pharmacy feud
- Skokie (IL) Patch reports that Express Scripts customers who fill their prescriptions at Walgreens .
- The St. Louis Business Journal says Express Scripts could process about 90 million prescriptions through Walgreens in fiscal year 2011, representing approximately $5.3 billion in annual sales.
- The Express Scripts v. Walgreens feud made headlines in the New York Times as well. A story in the business section says the relationship with Express Scripts represents 7 percent of annual revenue for Walgreens.
- At least one view from Wall Street holds that the Walgreens decision won’t adversely affect Express Scripts. As reported by bezinga.com, JP Morgan maintains its “overweight” rating for the Express Scripts. (Investopedia.com defines the term: “Overweight will usually signify that the security is expected to outperform either its industry, sector or, even, the market altogether.)”