It's splitsville for GM and Walgreens

March 7, 2005

General Motors' decision to drop Walgreens as its drug provider has prompted the chain to fight back by publicizing "the myth of mail order." Walgreens claims employers can save money by giving workers the choice to fill 90-day supplies of chronic meds at retail or mail-order pharmacies rather than by requiring them to use the latter exclusively.

General Motors' decision to drop Walgreens as its drug provider has prompted the chain to fight back by publicizing "the myth of mail order." Walgreens claims employers can save money by giving workers the choice to fill 90-day supplies of chronic meds at retail or mail-order pharmacies rather than by requiring them to use the latter exclusively.

GM and its pharmacy benefit manager, Medco Health Services, said the automaker was dropping Walgreens because it feared the chain might sever ties with the automaker over its policy of requiring mail-order purchases of some drugs. In December 2004, Walgreens said that as of Jan. 1, 2005, it would stop doing business with the state of Ohio because it disapproved of Ohio's mandatory mail-order program for some drugs.

Acknowledging that Walgreens was surprised by GM's announcement, the chain's spokesman Michael Polzin told Drug Topics, "We had no intention of dropping GM, and our policy would not call for dropping GM in this situation. GM was getting bad information from its PBM, which was driving the decision."

Polzin said the industry must make companies and their PBMs aware of the value retail R.Ph.s provide and the cost savings companies could achieve by getting 90-day supplies from retail pharmacies. "Because of their personal relationship with the patients and the doctors, retail pharmacists are in a better position to recommend lower-cost alternatives. And that can save companies a significant amount of money," he said. "That's what we are seeing through our own PBM with our Advantage 90 program."

That program, created more than a year ago, offers clients the opportunity to give their employees a choice between having 90-day Rxs filled at a retail or mail-order pharmacy. The average cost of a 90-day Rx refilled by a retail pharmacy is $15 less than that from a mail service, claimed Polzin. "GM is paying more for generics through Medco than it would pay at retail drugstores," he said. A Medco spokesman said, "GM saved $80 million using a mail-incentive program."

At press time, Polzin said the chain had received calls from GM employees who were upset that they would not be keeping their relationship with their pharmacists. "We're talking to GM this week," he said. "We're giving GM the information we don't think it's getting from its PBM. We hope we can continue filling Rxs for GM employees."

The National Association of Chain Drug Stores issued a one-line statement when queried about the GM-Walgreens situation and its implications for chain pharmacies. "We will always stand for those who respect the patients' right to choose their community pharmacy."