Walmart and CVS Split Over Pricing

Tuesday, January 15, 2019


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Walmart and CVS Health’s partnership is over. CVS made the announcement Tuesday that Walmart pharmacies will no longer be part of the networks where most consumers with CVS Health Corp. drug plans can pick up their prescriptions.

The split up is due to a battle over pricing.  CVS stock fell 1.5 percent after the announcement.

“At a time when everyone is working hard to find ways to reduce health care costs, Walmart’s requested rates would ultimately result in higher costs for our clients and consumers,” said Derica Rice, President, CVS Caremark, the pharmacy benefit management business of CVS Health. “While we have enjoyed a long relationship with Walmart as a low cost provider in our broad national networks, based on our commitment to helping our clients and consumers manage rising pharmacy costs, we simply could not agree to their recent demands for an increase in reimbursement.”

“CVS is one of the largest administrators of prescription-drug plans in the U.S., covering more than 93 million people. While known mostly for its drugstores, CVS’s pharmacy-benefits management division, CVS Caremark, has come to account for most of its revenue. It administers drug coverage for many large employers as well as numerous Medicare and Medicaid beneficiaries, “ according to Bloomberg.

Currently, less than 5 percent of affected CVS Caremark members use Walmart exclusively to fill their prescriptions. The retail pharmacy network is well-positioned, even without Walmart, to provide members with access to a local pharmacy, said CVS.

With more than 63,000 other pharmacies that will remain in the CVS Caremark national pharmacy network, the network continues to exceed industry benchmarks with regards to network pharmacy access by a significant margin without Walmart. In fact, the average distance that a member would need to travel to reach an in-network pharmacy, without Walmart in the network, remains virtually unchanged.


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