Highmark pharmacies may exclude Walgreens, Target
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A plan by Highmark Inc. to streamline its pharmacy network and a contract dispute between Walgreen Co. and Express Scripts, which manages UPMC Health Plan's pharmacy program, could have many Walgreens customers looking for a new pharmacy soon.
Beginning in January, Highmark will begin its transition to a new network that will exclude Walgreens and Target pharmacies.
The move, initially affecting about 100,000 members of Highmark's small group market, will be completed by Dec. 31, 2013, according to a statement from the insurer.
The move was a result of Highmark's ability "to negotiate more aggressive discounts with the pharmacies that remained in the network, resulting in savings for Highmark's employer groups and members," the statement said.
While the Highmark pharmacy network will go from 61,000 pharmacies to 52,000, Highmark officials say more than 96 percent of its members will still be within seven miles of a network pharmacy.
Highmark's specialty drug program contract with Walgreens Specialty Pharmacy, meanwhile, is effective through Dec. 31, 2014.
The Walgreens-Express Scripts disagreement centers on two issues, according to Walgreens spokesman Michael Polzin: reimbursement rates and what he called a demand by Express Scripts "to be able to unilaterally define contract terms" such as determining which drugs will be classified as generic.
Express Scripts spokesman Thom Gross, meanwhile, says it was Walgreens that wanted to change the terms of the contract.
As for seeking a lower rate, he said that rates are based on a percentage cost of the drug.
While drug costs continue to rise, the service provided by the pharmacy is unchanged so Express Scripts believes rates should reflect that, he said.
Mr. Polzin declined to comment on any possible negotiations, saying "right now, we are planning on not being a part of the Express Scripts network beginning Jan. 1." He said Walgreens has about 60 pharmacies in the Greater Pittsburgh area. "It's not one of our larger markets."
Both sides said they expect an expired contract would have minimal impact, as Walgreens will make up most of the lost volume through the addition of new health plans, and Express Scripts says it has contracts with pharmacies no more than a half mile from any local Walgreens pharmacy.
First Published December 14, 2011 12:00 am