When Walgreens said Tuesday that it plans to stop filling prescriptions for customers covered by St. Louis-based drug benefits manager Express Scripts on Jan. 1, 2012, after the two companies failed to reach an agreement in contract renewal negotiations.
Express Scripts, which has an office in Irving, processes approximately 90 million prescriptions that are expected to be filled by Walgreens in fiscal 2011, representing approximately $5.3 billion in annual sales. Beginning next year, Express Scripts’ (NASDAQ:ESRX) network will no longer include Walgreens (NYSE:WAG) (NASDAQ:WAG) 7,700 pharmacies nationwide.
While we have sought to negotiate a contract renewal agreement over the past several months, those talks have been unsuccessful,” Walgreens President and CEO Greg Wasson said in a statement. “Under the terms proposed by Express Scripts, it would not make good business sense for the strategic direction of our company to continue our relationship with them. 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.
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