Walmart, CVS to Part Ways Over Fees

January 16, 2019

The dispute between the two companies highlights ongoing frustrations with the PBM model.

Walmart is planning to leave CVS Health Pharmacy’s network after a dispute arose regarding plans to raise reimbursement fees.

As first reported in the Wall Street Journal, Walmart is claiming that the price increase was developed as a way to maintain health relationships with partners; however, CVS Health suggests that the price increase would only hurt consumers and clients.

"While we have enjoyed a long relationship with Walmart as a low cost provider in our broad national networks, based on our commitment to helping our clients and consumers manage rising pharmacy costs, we simply could not agree to their recent demands for an increase in reimbursement,” Derica Rice, President of CVS Caremark said in a press release.

Since no apparent agreement could be reached, Walmart chose to leave the pharmacy network. Those affected by the split will be those whose employers have CVS-administered drug benefits and Medicaid enrollees with CVS drug coverage.

“We are committed to providing value to our customers across our business, including our pharmacy, but we don’t want to give that value to the middleman…. Walmart is standing up to CVS’s behaviors that are putting pressure on pharmacies and disrupting patient care,” an unidentified spokesperson told the Wall Street Journal.

Medicare pharmacy networks, Sam’s Club stores - Walmart’s warehouse stores- and CVS’s financial results are likely to remain unaffected.

The split is not likely to occur soon, as Walmart has been asked to fill prescriptions through April 30th, 2019.