Dear Pharmacy Benefit Managers, There Is Now An Oligopoly On Both Sides of Your Contract. Prepare To Reap What You Have Sown.

I've known this day was coming for years. I wish I would have written about it earlier so you would all know how wise I am.

I did used to joke about it with District Managers though. As the years went by and the competitors became fewer, I would regularly say things like "When are we going to be be big enough that we can start telling the insurance companies what we are willing to let them pay us?"

The answer, if you're Walgreens, was yesterday:

Walgreen Co., the nation's largest drugstore chain, landed a punch on CVS Caremark Corp. when it said on Monday that it won't fill prescriptions for patients newly covered under pharmacy-drug plans administered by CVS's Caremark unit.
Walgreen said it objects to how some CVS prescription plans use discounts to prod patients with chronic conditions to use either CVS stores or its Caremark mail-order pharmacy. Walgreen also cited CVS Caremark's "unpredictable" reimbursement rates and lack of information when patients transfer to other plans. Working with CVS, it said, is "no longer in the best interests" of customers, pharmacists and shareholders.

Never before can I remember a drug chain growing a pair and standing up to an entire Pharmacy Benefits Manager like this. There have been squabbles over individual contracts from time to time, and occasional gamesmanship when it came to a state Medicaid plan now and then, but it takes way bigger cajones to take on corporation number 18 in the Fortune 500 than it does to pick on a state government these days.This is huge. This has the potential to inconvenience middle class people, and possibly a few who are affluent.

Granted, this particular PBM is owned by Walgreen's main retail rival, which gives the Pharmacy America Trusts an extra incentive to go after them, but still, this is a step up from picking on the poor people. A big fight is brewing between two of the two-and-a-half major drug chains left in this country. Who do we as a profession root for?

Injuries, mostly. One of these corporations has a pilot program that has turned pharmacists into cashiers in lab coats and the other has de-professionalized its operations to the point where they can evidently hum along just fine with someone in charge only pretending to be a pharmacist. Wasn't it Rocky II that had that cheeseball ending where both Rocky and Apollo Creed knock each other out and are simultaneously struggling to get up before the final bell? Something like that would be ideal.

But something like that will most likely not happen. Walgreens and CVS will huff and puff over the next few weeks or months. They will arch up their backs and growl like two tomcats in the alley at three o'clock in the morning, and in the end, they will reach some sort of agreement that will spare the middle class any inconvenience. After all, as far as I know even with the poor people it never got to the point where the trigger was actually pulled on them.

But, the precedent has been set. In the post Revco, Super-X, Phar-Mor, Eckerd, Duane Reade, Reliable, People's Drug, Brooks, Drug Emporium, and Longs world, Walgreen's has woken up and realized it can threaten any PBM with an immediate loss of 12% of the locations where that PBM's members can have prescriptions filled. The people at Medco must be shitting their pants right about now. And while the prospect of Medco shitting its pants is a happy one, I do hope Walgreen's takes a few head punches first. I plan to sit back and watch this one like a white guy at a California prison riot.
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Dear Pharmacy Benefit Managers, There Is Now An Oligopoly On Both Sides of Your Contract. Prepare To Reap What You Have Sown.
Dear Pharmacy Benefit Managers, There Is Now An Oligopoly On Both Sides of Your Contract. Prepare To Reap What You Have Sown.
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