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

Search for Jobs

Index Last Change % Change
Dow 20,821.76 11.44 0.05%
Nasdaq 5,845.31 9.80 0.17%
S&P 500 2,367.34 3.53 0.15%
Treasuries 2.32 -0.07 -2.97%
Data as of 10:21am ET
Company Price Change % Change
Bank of America Corp... 24.23 -0.35 -1.42%
Spectra Energy Corp 40.68 -0.32 -0.78%
Chesapeake Energy Co... 5.66 -0.09 -1.57%
Hewlett Packard Ente... 22.96 -1.70 -6.89%
Ford Motor Co 12.47 -0.09 -0.72%
Data as of Feb 24
Sponsors

Sections

Baltimore Orioles executive John Angelos said he would want President Trump to apologize for all the offensive comments he's made before he's invited to throw out the first pitch at Camden Yards. More

A draft of the House Republicans' bill to repeal Obamacare would replace its subsidies with less generous tax credits, increase the amount insurers could charge older Americans and effectively eliminate Medicaid for low-income adults. More

Data Refuge collects federal data about climate change in order to preserve the information and keep it publicly accessible. More