Big moves by Walgreens: Drops PSC price, acquires Kmart files in 16 states

January 31, 2012

Walgreens has taken 2 major steps to grow the customer base of its pharmacies since ending its relationship with pharmacy benefits manager Express Scripts on January 1.

Walgreens has taken 2 major steps to grow the customer base of its pharmacies since ending its relationship with pharmacy benefits manager (PBM) Express Scripts on January 1.

First, the company lowered the cost of membership in its Prescription Savings Club (PSC) program. Then, Monday, Walgreens acquired the prescription files and inventory from 33 closing Kmarts in 16 states.

Walgreens spokesman Michael Polzin said its PSC program had increased by “hundreds of thousands” of additional customers after the company lowered the annual membership fee from $35 to $10 for families and from $25 to $5 for individuals.

The lowered membership fee is 1 of the ways that Walgreens is trying to help customers that had been using Express Scripts, which offered the retailer significantly lower reimbursement rates.

“Our pharmacists are providing options for people who want to continue using Walgreens for their pharmacy. If they are under an Express Scripts plan, the PSC can be a very good for many of them, especially if they take generic medications,” Polzin said.

The PSC touts discounts on all generic medications and on 8,000 brand medications. It offers 400 medications for less than $1 a week, when patients order a 90-day supply, according to Polzin.

In addition, since the Walgreens and Express Scripts partnership ended, more than 120 Express Scripts clients have changed PBMs or “taken steps that are consistent with their Express Scripts contract in order to maintain access to Walgreens pharmacies,” Polzin said.

As a result of the loss of Express Scripts, Walgreens expected to see a slight decrease in volume in 2012. In fiscal year 2011, Walgreens filled 819 million prescriptions.

However, that loss could be negated by additional customers from 33 Kmarts.

Walgreens said it will transfer the patient files it purchases from closing Kmarts to nearby Walgreens pharmacies. Patients whose prescription files are being transferred and who have had a prescription filled within the last 2 years will be notified by letter once the transaction has been completed later in February.

"We are pleased to maintain convenient access to high quality pharmacy and health and wellness services for Kmart patients from these pharmacies," David Lovejoy, Walgreens' vice president of pharmacy services, said in a press release.

"We are working with Kmart to make this transition as seamless as possible and quickly introduce our new customers to the expanded health and wellness services that have helped build Walgreens reputation for patient care."