NEW YORK (Reuters) - Walgreen said it would not participate as a provider in any new and renewed drug plans picked up by CVS Caremark's pharmacy benefit manager, which it accused of bypassing its pharmacies in favor of its own.
In a letter to CVS Caremark, Walgreen said the company's promotion of some prescription drug plans disrupted networks. CVS Caremark has been making patients with chronic conditions in many plans use CVS pharmacies or Caremark mail service facilities for their prescriptions instead of Walgreens, the letter said.
"Unfortunately, as a result of CVS Caremark's pharmacy benefit management practices toward Walgreens, it no longer makes good business sense for Walgreens to be part of their network for new and renewed plans," Chief Executive Officer Greg Wasson said.
Shares of CVS were down 8 percent at $31.09, while Walgreen fell 1.2 percent to $30.47.
The decision will not affect current CVS Caremark plans in which Walgreen is already a pharmacy provider, the drugstore chain said.
"In the three years since the CVS-Caremark merger, it has become increasingly clear to us that Caremark's approach to Walgreens as a community pharmacy within CVS Caremark's retail network has fundamentally changed," said Kermit Crawford, Walgreen executive vice president of pharmacy.
CVS bought Caremark for $27 billion to expand its PBM, which administers prescription drug benefits for employers and health plans and operates a large mail-order pharmacy.
(Reporting by Nivedita Bhattacharjee; Editing by Lisa Von Ahn)
