Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — State employees who use Walgreens to fill their prescriptions will soon have to find another pharmacy.

Earlier this week, CVS Caremark, the company that provides pharmacy benefits to members of the State Employee Health Benefit Plan, announced that it would no longer include Walgreens pharmacies in its provider network.

The two companies are embroiled in a disagreement over reimbursement rates, certain drug plans and how prescriptions are transferred between pharmacies, according to press statements released earlier this week by the two companies.

On Monday, Walgreens announced that it would no longer participate as a CVS Caremark pharmacy provider for contracts issued after July 7. On Wednesday, CVS Caremark announced that it would no longer include Walgreens locations as in-network pharmacy providers beginning July 9.

“This is a dispute involving competition between the pharmacy benefit manager and another large, national retail chain, and it isn’t limited to the state of Kansas,” said Doug Farmer, deputy director of the Kansas Health Policy Authority and SEHP director, in a prepared statement. “We recognize this will be a disruption for our members, and we are working on plans to minimize that disruption.”

Farmer said most members of the state plan who use Walgreens should have access to another in-network pharmacy close by.

“In any area where there’s a Walgreens pharmacy, there is also another pharmacy that will still be part of the network,” he said.

Last year, Walgreens filled about 24 percent of the prescriptions written for members of the state health insurance plan, according to the health policy authority.

The plan currently covers about 100,000 individuals, including state workers and their dependents, employees of certain local governmental units and retired employees who elect to continue their state coverage after retirement.

Farmer said CVS was preparing notification letters for members who have filled a prescription at Walgreens within the last three months. The letter will include instructions for transferring prescriptions to a participating pharmacy in the CVS Caremark retail network. It will also include a list of three in-network pharmacies nearest to the plan members’ homes.

Plan members may also locate in-network retail pharmacy locations through a zip code search using the “Find a Local Pharmacy” feature on www.Caremark.com.

Earlier this month, the Health Care Commission, which oversees the design of the state health plan, approved a three-year contract with CVS Caremark for the plan’s pharmacy services.

The company has been scrutinized this year by the Kansas Legislature after concerns were raised by a national union group over the company’s pricing structure.