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Walgreens reaches out to benefit consultants on healthcare value

Reiterates plan to withdraw from ESI PPN

DEERFIELD, Ill. — Walgreens on Wednesday directly appealed to benefit consultants with a letter apprising them of the chain’s withdrawal from Express Scripts’ pharmacy provider network, effective Jan. 1, 2012, and educating those consultants of the healthcare value that Walgreens still can deliver without Express Scripts.

The letter also makes a direct appeal to plan sponsors whose pharmacy benefit manager contracts soon will come up for renewal to either “select a PBM that includes Walgreens' more than 7,700 pharmacies in their networks,” or perhaps consider “direct arrangements with plans currently using Express Scripts, to the extent permitted by their contracts.” The letter, a copy of which has been obtained by Drug Store News, included “a template agreement that can be used to implement such direct arrangements where permitted,” for consideration.

“We … wanted to remind you of the significant value Walgreens provides to plan sponsors and their members, as they consider their pharmacy benefit decisions,” Kermit Crawford, Walgreens president of pharmacy, health and wellness, wrote in the letter.

According to the letter, this includes:

  • Better generic performance. Walgreens helped Express Scripts clients drive greater penetration of generics — 73.9% during 2010 — which is 140 basis points better than the average of the Express Scripts retail network excluding Walgreens, based on Express Scripts’ own data. Walgreens consistently performs better in quickly driving generic utilization, reaching 80% generic utilization on new molecules more than four months faster on average than the industry average. This better generic performance translates to average savings of more than $2 per script, or $12 to $16 per member per year, which can save millions of dollars for plan sponsors in avoiding unnecessary branded drug costs;

  • More convenience and access. Walgreens offers the most retail pharmacies of any chain, including the most with 24-hour access, as well as drive-through pharmacies and a fully integrated online pharmacy with “scan your refill” options at all times and locations, and online pharmacy chat lines available to patients. Convenience and access translates into savings for plan sponsors by avoiding unnecessary emergency room and other hospital costs;

  • Competitive unit prices. Walgreens has highly competitive unit prices validated by external benchmarks. In fact, during the company's recent acquisition of Duane Reade it found Walgreens offered significantly better unit prices;

  • Savings from chronic medication management. Walgreens offers superior programs that can help reduce not just pharmacy costs, but also medical costs, which is where the majority of the cost-savings opportunities exist. The Walgreens “Retail 90” program results in a 15 percentage point improvement in adherence to medications. In fact, Walgreens has the highest penetration of 90-day supply in the industry, at more than 20% of its adjusted scripts, whereas many pharmacies do not even have a 90-day offering. 90-day retail results in lower costs and savings for plan sponsors, often at unit rates that end up costing plan sponsors less than mail programs. Walgreens find these cost savings programs are often not adequately promoted by Express Scripts to plan sponsors; and

  • Broader healthcare value. Walgreens has the largest in-store immunization program, with more than 26,000 pharmacists who are certified immunizers. In fact, Walgreens is the second-largest provider of flu shots in the country, second only to the U.S. government. Walgreens also has more than 700 Take Care Clinics and worksite health-and-wellness centers providing easy, affordable access to health care. Many of these are in communities that are medically underserved.

“Plan sponsors whose pharmacy benefit management contracts are currently up for renewal may wish to select a PBM that includes Walgreens’ over 7,700 pharmacies in their networks,” Crawford added. “We also would be pleased to discuss direct arrangements with plans currently using Express Scripts, to the extent permitted by their contracts. We have attached for your consideration a template agreement that can be used to implement such direct arrangements where permitted.”

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