Walmart Inc. will stay in all of CVS Health Corp.'s pharmacy networks after the companies said earlier this week they couldn't reach an agreement on reimbursement rates for drug costs.
Walmart and CVS Health said in a joint news release Friday that they've reached a multiyear agreement on terms under which the Bentonville retailer will continue to participate in the CVS Caremark pharmacy-benefits management commercial and Managed Medicaid retail pharmacy networks. The companies are not disclosing the financial terms of the new contract.
CVS Caremark is the preferred-benefits management subsidiary of Rhode Island-based CVS Health.
Pharmacy-benefits managers serve as third-party negotiators between pharmacies and manufacturers to secure discounts on drug prices, which they then pass along to insurance companies while slightly up-charging the drugs or keeping a portion of rebates as profit, according to Investopedia.com.
"We are pleased to have reached fair and equitable terms with CVS Caremark that are in the best interest of our customers," Sean Slovenski, Walmart's senior vice president of health and wellness, said in the news release.
CVS Caremark President Derica Rice said in the release that the agreement lets the company help its clients and consumers lower their pharmacy costs while keeping Walmart in all its pharmacy networks. The agreement also "provides enhanced network stability for our clients and their members," she said.
The dispute did not affect Walmart's participation in CVS Caremark's Medicare Part D drug plan or that of Walmart's Sam's Club division in all CVS Caremark pharmacy networks.
On Tuesday, CVS Caremark had said it could not agree to the increase in reimbursement rates Walmart requested for prescription drugs dispensed at its pharmacies. Rice said in a news release that granting the request would "ultimately result in higher costs to our clients and consumers."
Walmart, in turn, said it was "committed to providing value to our customers across our business, including our pharmacies, but we don't want to give that value to the middleman." Its emailed statement continued, "This issue underscores the problems that can arise when a pharmacy-benefits manager can exert their unregulated power to direct members on where to fill their scripts, disrupting patients' health care."
In an emergency special legislative session last year, Arkansas enacted a law requiring pharmacy-benefits managers to be licensed and allowing the state insurance commissioner to ensure their reimbursement rates are fair and reasonable. According to the National Community Pharmacists Association, the law came about through "an organized effort by Arkansas pharmacists to address drastic cuts in reimbursements."
The Arkansas Pharmacists Association said in an emailed statement that tensions between the state's pharmacists and preferred-benefits managers had escalated as the latter lowered the reimbursement prices that pharmacists received when they filled a prescription.
"Last year, patients got their first look behind the curtain of the pharmacy-benefits management industry when many of them weren't able to use their pharmacist of choice because PBMs weren't paying a fair price," John Vinson, the association's chief operating officer, said in the statement.
Business on 01/19/2019