Walgreens shut out of Tricare retail pharmacy network

September 11, 2012

Tricare, the health plan for military personnel, retirees, and dependants, has decided not to put Walgreens back in its retail pharmacy network.

Tricare, the health plan for military personnel, retirees, and dependants, has decided not to put Walgreens back in its retail pharmacy network. Walgreens left the Tricare network in December 2011 as part of its dispute with Express Scripts, the pharmacy benefit manager that handles military pharmacy benefits.

"Express Scripts has determined it will maintain the same robust retail pharmacy network of more than 57,000 pharmacies," Pentagon officials said in a statement posted on the Tricare website. "…in line with the TRICARE Management Activity’s commitment to the efficient management of the TRICARE pharmacy benefit, Walgreens will remain designated as a non-network pharmacy provider for TRICARE beneficiaries."

When Walgreens and Express Scripts parted ways at the end of 2011, health plans that had included Walgreens in their retail pharmacy network had to find replacement pharmacies. When the two industry giants settled their differences in July, a Walgreens spokesman said the decision to return Walgreens to Express Scripts networks would be up to each individual health plan, available starting September 15, 2012.

The Department of Defense decided against Walgreens.

In retrospect, the decision should not be a surprise. Rear Admiral Thomas J. McGinnis, assistant surgeon general, U.S. Public Health Service, and the chief of Tricare’s Pharmaceutical Operations Directorate, said in January that Walgreens’ exit would benefit the Department of Defense. Not having network access to Walgreens would push more beneficiaries to use military pharmacies and mail order. Both alternatives are less expensive to the federal government than community retail pharmacy services.

In August, Tricare said it had received a record-breaking 1.38 million prescription orders for home delivery for the first 5 months of the year. Mail-order use was up by 30% through May, while retail pharmacy utilization fell 10%, according to Tricare Management Activity. Beneficiaries can fill covered scripts at military pharmacies for a zero copay, obtain generics through mail order at a zero copay, or use retail pharmacies.