Walgreens to Cease Providing for CVS Caremark Prescription Plans

There's something funky going on with prescription drug coverage in Tennessee.

Walgreens has announced that as of this month it will no longer be a provider in any new or renewed contracts for prescription drug plans administered by CVS Caremark. The company said it wouldn't do business with Caremark, the company that is the pharmacy benefits manager for state employees and teachers in Tennessee, because of "the unpredictability of CVS Caremark reimbursements," transparency, and Walgreens says Caremark has requirements for chronic users to use CVS drug stores or Caremark mail order. Walgreens will honor existing contracts until they expire.

Local druggists, many of whom have opted out of Caremark, say reimbursement rates are driving customers to use CVS pharmacies instead of other stores.

When Caremark and CVS merged there was an argument made that the pharmacy benefits manager—Caremark—would be "agnostic" about the supplier of the drugs. In a letter to local teachers this month, a new pharmacy plan was announced that offers mail service through Caremark that allows a three-month supply of drugs for the cost of a 30-day supply. The letter says you can also fill prescriptions at big box retail pharmacies and some local pharmacies, including CVS, Walmart, Kroger, Target, and Walgreens. (Presumably until Walgreens' contracts expire.)