Retailers, consumers and prices
Check out the happy ending to the fight between CVS Caremark and Walgreen over reimbursements for drug prescriptions.
The two drugstore chains left their differences behind and announced a new “multi-year” deal, salvaging a relationship worth billions of dollars.
Earlier this month, Walgreen said it would phase out its arrangement to fill prescriptions for millions of CVS Caremark drug plan members, citing CVS’s efforts to divert customers and inadequate reimbursement rates. CVS retaliated by saying it would dump Walgreen from its network within a month.
The new deal allows Caremark members to continue to fill their prescriptions at Walgreens pharmacies.
Walgreen officially owns New York’s Duane Reade drugstore chain as of Friday, less than two months after the deal was announced. Walgreen, which got its start in Chicago and is based in a nearby Illinois suburb, is now the biggest drugstore operator in New York City after adding 258 Duane Reade stores, two distribution centers and a corporate office to its 70 stores in the area.
A small percentage of Duane Reade’s stores are rather snazzy, some new and others renovated, and stand out compared to other drugstores, including Walgreens stores, in the Big Apple. Those makeovers and Duane Reade’s strong push into private label products were some of what attract Walgreen, which is working on its own store upgrades. (But there are still dozens of Duane Reade stores that have yet to get a makeover.)
Statisticians in the drugstore industry (if they are out there), must be scratching their heads.
CVS opened its 7,000th store on Sunday. It was a pretty big deal, with the drugstore company’s president, Larry Merlo, even heading to Little Canada, Minnesota, for Thursday’s grand opening celebration.