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 16,643.01 -11.76 -0.07%
Nasdaq 4,828.33 15.62 0.32%
S&P 500 1,988.87 1.21 0.06%
Treasuries 2.19 0.02 0.83%
Data as of 2:54pm ET
Company Price Change % Change
Freeport-McMoRan Inc... 10.50 0.31 3.04%
Bank of America Corp... 16.36 -0.08 -0.49%
Apple Inc 113.29 0.37 0.33%
Intel Corp 28.42 0.70 2.53%
Alcoa Inc 9.41 0.55 6.21%
Data as of Aug 28
Sponsors

Sections

Efforts to unionize low-wage employees of fast-food franchisees and outside contractors get lift from decision of NLRB. More

The U.S. economy has performed well this year. But there's lots of global gloom. Which will influence the Fed the most? More

The market volatility in China and the U.S. could hit private companies, especially late-stage unicorns. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Looking for something good on Netflix? These entertaining films will help you learn more about finance and investing. More