Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

CVS and Walgreens kiss and make up

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- A heated battle between two of the nation's largest drug chains came to an end Friday after a compromise under which Walgreens will continue participate in CVS Caremark's pharmacy benefit management network.

The drugstores did not disclose financial terms of the new contract. Shares Walgreens (WAG, Fortune 500) were up about 8% in pre-market trading, and CVS' (CVS, Fortune 500) stock was 5% higher.

"The agreement makes good business sense, provides the framework we need to operate our business going forward, and assures choice and convenience for the many consumers who look to us for quality pharmacy care," said Walgreens executive vice president of pharmacy Kermit Crawford in a statement.

CVS's president Per Lofberg added that his company is also "pleased" to have reached a solution.

Earlier this month, Walgreens said it was no longer willing to participate in a new or renewed benefits plan from its rival's drug benefits unit, citing a list of criticisms including unpredictable drug reimbursement rates.

Another complaint was related to CVS Caremark's Maintenance Choice plan, which requires patients with chronic conditions to fill prescriptions at CVS or through Caremark mail services, instead of at Walgreens or other pharmacies.

Drug benefits provider Caremark merged with retail pharmacy CVS in 2007, and CVS CEO Tom Ryan promised at the time that the Caremark business would not favor one pharmacy over another. But Walgreens' gripe about Caremark's preferential treatment of CVS stores was echoed by other drugstores.

In response to the Walgreens announcement, CVS dropped the rival from its pharmacy benefits plan last week.  To top of page

Index Last Change % Change
Dow 15,627.45 -287.29 -1.81%
Nasdaq 4,246.53 -37.06 -0.87%
S&P 500 1,824.26 -27.60 -1.49%
Treasuries 1.61 -0.09 -5.57%
Data as of 2:44pm ET
Company Price Change % Change
Bank of America Corp... 11.04 -0.94 -7.85%
Cisco Systems Inc 24.69 2.18 9.68%
General Electric Co 27.16 -1.14 -4.03%
Apple Inc 93.03 -1.24 -1.32%
Chesapeake Energy Co... 1.62 -0.08 -5.00%
Data as of 2:29pm ET
Sponsors

Sections

Boeing's stock fell by as much as 12% after Bloomberg reported the SEC is investigating the company's accounting practices. More

The S&P 500 has lost 11% in the first six weeks of the year and the Nasdaq is near bear market territory. But the U.S. economy is not in a crisis. More

Twitter's stock is sinking fast after the company reported that it lost customers in the fourth quarter of 2015. More

Bloom Technologies impresses Richard Branson to win the Extreme Tech Challenge startup contest. More

GOP presidential candidate Marco Rubio wants some radical changes to the tax code. But the numbers don't add up, according to a new analysis. More