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 17,888.35 168.43 0.95%
Nasdaq 5,156.31 47.64 0.93%
S&P 500 2,102.63 22.22 1.07%
Treasuries 2.16 -0.06 -2.84%
Data as of 8:31pm ET
Company Price Change % Change
Bank of America Corp... 17.81 0.38 2.18%
General Electric Co 30.17 0.23 0.77%
Pfizer Inc 33.62 0.85 2.59%
Microsoft Corp 55.22 0.87 1.60%
Apple Inc 117.34 -0.96 -0.81%
Data as of 4:02pm ET


Cyber Monday saw an increase in the number of out-of-stock items this year, according to data from Adobe. More

Strong November U.S. car sales has industry poised to set a record for sales once December results are reported. More

Hive, a startup funded by the UN, is tasked with getting more Americans engaged with the refugee crisis. More

Have you heard of Harvey Mudd College? A degree from this small liberal arts school can cost more than a house, but grads earn about $92,300 a year after getting their degree. Google hired 11 Mudders last year. More