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

TOPEKA — A dispute that threatened to limit the pharmacies where state employees could have their prescriptions filled has been settled.

CVS Caremark, which has the contract to provide pharmacy services for the State Employees Health Benefit Plan, had been at loggerheads with rival pharmacy giant Walgreens, prompting each company to announce they would not accept the other's outlets in their network plans.

The two pharmacy companies were in disagreement on reimbursement rates, certain drug plans and how prescriptions were transferred between their pharmacies.

But the dispute has been settled, according to an announcement today by the Kansas Health Policy Authority, the agency that oversees the plan that covers state government workers and their dependents.

“We’re pleased that the two companies have reached an agreement and that our members who use Walgreens pharmacies won’t experience any disruption,” said Doug Farmer, deputy director of the health policy authority and director of the state employee health plan.

Walgreens and CVS Caremark also issued a joint statement that they had reached agreement on terms under which Walgreens would continue participating in the CVS Caremark benefit management national retail network for current, new or renewal plans.

CVS has a contract with the state to act as the employee plan's pharmacy benefit manager. The contract was scheduled to expire at the end of the year. A three-year renewal contract had been renegotiated and signed by the company. It was approved by state officials in May but had not yet been signed by them.

On Thursday, the Kansas Health Care Commission, which oversees the employee plan, instructed the health policy authority to review the new contract because of concerns over the company's dispute with Walgreens.

CVS had earlier announced that effective July 9, Walgreens would no longer be part of its network, meaning that would that state employee plan members no longer would have been able to fill prescriptions at any Walgreens.

Commissioners said if the agency still thought the contract was a good idea after the review, then they would go forward with it. If not, they would begin looking for another contractor.