Express Scripts, Walgreen Dispute Goes To Court
September 14 2011 - 1:36PM
Dow Jones News
The ongoing dispute between Express Scripts Inc. (ESRX) and
Walgreen Co. (WAG) has reached the courthouse, with the
pharmacy-benefit manager accusing the drugstore giant of violating
an agreement between the two firms while making disparaging
remarks.
The companies have a contract that runs through this year, but
renewal talks have broken down amid a public dispute involving
different views about which firm is making unreasonable demands. In
a court filing made last week, and referenced by an Express Scripts
executive Wednesday during a Morgan Stanley conference, Express
Scripts seeks to prevent what it sees as inappropriate actions and
statements from Walgreen.
"Walgreens has crossed a line and is not negotiating in good
faith," Express Scripts said in an emailed statement. "We will not
let this stand."
A Walgreen spokesman did not have an immediate comment regarding
Express Scripts's allegations.
Companies like Express Scripts handle prescription-drug benefits
and claims for employers and health-insurer clients. The company
filed its complaint in the U.S. District Court for the Northern
District of Illinois.
The complaint alleges "Walgreens has launched an aggressive
campaign to disparage Express Scripts, disenroll Express Scripts'
commercial and Medicare Part D members and to promote and prefer
other Medicare Part D programs to the exclusion of those offered
through Express Scripts."
Through the current agreement between the firms, the drugstore
agreed it wouldn't attempt to disenroll any Express Scripts member
or market one Part D plan over another, Express Scripts said. Their
agreement gives Walgreen access to more than 60 million Express
Scripts members, including about 2.5 million with Part D
prescription drug coverage through the government's Medicare
program.
In a court filing, Walgreen said its communications with Part D
customers did not violate its agreement with Express Scripts.
The relationship between pharmacy-benefit managers and retail
pharmacies has grown more contentious, in part because the benefit
managers operate mail-order pharmacies that compete for business.
Retail pharmacies have strongly opposed Express Scripts' plan to
acquire rival Medco Health Solutions Inc. (MHS) to create a clear
industry heavyweight.
Despite the heated nature of the public dispute, Express Scripts
has repeatedly said it remains willing to restart talks with
Walgreen. Chief Financial Officer Jeff Hall repeated this
Wednesday.
"We continue to be available to get to a resolution here," he
said at the Morgan Stanley conference.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
--Maxwell Murphy contributed to this article.