Walgreen semi-officially put a nail in the coffin of its contract with Express Scripts, sending shares sliding.
“There has been no substantive progress in the contract-renewal negotiations” with Express Scripts, the company said today. Walgreen already has said it planned to end its drug contract with Express Scripts after the end of this year.
The issue has created an overhang for Walgreen shares. Walgreen has said it generates about $5.3 billion in annual sales from its contract with Express Scripts. Now the pharmacists will have to steer people with Express Scripts drug-coverage cards to other retail outlets.
Walgreen says today it’s working with a number of partners to explore all options so that its partners’ employees and members retain access to Walgreen services. But with Express Scripts’s plans to buy fellow pharmacy-benefit manager Medco, investors have been worried Walgreen will be left with fewer alternate partners.
Both stocks have taken a hit as a result of this.
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