BREAKING NEWS: CVS Caremark and Walgreens Announce New PBM Network Pharmacy Agreement
Both sides had good reasons to resolve this situation quickly. CVS Caremark needed to minimize damage to its PBM business, while Walgreen faced an enormous revenue hit from the loss of Caremark. Everyone also recognized the enormous disruption for patients caused by a permanent split.
The announcement is filled with PR fluff, but it looks like a bigger win for CVS Caremark since Maintenance Choice remains in place. It's definitely a short-term positive for Walgreen because they avoid a devastating $7 billion revenue loss. Longer term, Walgreen's perceived bargaining power in the drug channel has been reduced. However, CVS Caremark's has also raised questions for payers about its ability to manage the retail network.
So, what have the participants in this drama learned? Probably nothing, but I'll submit the following for your consideration:
1. Don't bring a knife to a gun fight. (Walgreens)
2. Don't cut off your nose to spite your face. (CVS Caremark)
Thanks to everyone who followed the brouhaha on Drug Channels! Blog traffic hit a new record over the past two weeks.