Walmart Exiting CVS Commercial, Managed Medicaid Retail Pharmacy Networks

Walmart Inc. has decided to leave the CVS Caremark pharmacy benefit management (PBM) commercial and Managed Medicaid retail pharmacy networks over a pricing dispute. CVS Health has requested that the mega-retailer continue to fill prescriptions as an in-network participating pharmacy through April 30.

Walmart will remain in the CVS Caremark Medicare Part D pharmacy network, however, while the company’s Sam’s Club division will stay part of the CVS Caremark pharmacy networks.

According to CVS, Walmart’s move isn't expected to have a significant effect on CVS’ 2019 financial results.

Regarding the change, in a statement quoted by CNBC and Bloomberg, a Walmart spokeswoman expressed the company’s disappointment that “CVS chose not to come to a resolution in a way that is beneficial to their members who are also our customers,” adding that Walmart wished to pass along savings to its customers, rather than a middle man.

According to the spokeswoman: “This issue underscores the problems that can arise when a PBM can exert their unregulated power to direct members on where to fill their scripts, disrupting patients’ health care. Walmart is standing up to CVS’s behaviors that are putting pressure on pharmacies and disrupting patient care.”

 “At a time when everyone is working hard to find ways to reduce health care costs, Walmart’s requested rates would ultimately result in higher costs for our clients and consumers," observed Derica Rice, president of CVS Caremark, the pharmacy benefit management business of CVS Health, laying the blame for the dispute on the mega-retailer. “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.”

CVS Caremark said that it would work to ensure no disruption in therapy for network members, and that their transitions to new pharmacies go smoothly, adding that those affected “will be notified and will have access to information to help them identify nearby in-network pharmacies where they can fill their prescriptions.”

Further, noting that “less than 5 percent of affected CVS Caremark members [currently] use Walmart exclusively to fill their prescriptions,” CVS Caremark noted, “The retail pharmacy network is well positioned, even without Walmart, to provide members with access to a local pharmacy.”

Rice added that “we … remain open to continuing timely good-faith negotiations with Walmart in the hopes of reaching an agreement to provide quality pharmacy care at a reasonable cost.”

Woonsocket, R.I.-based CVS has more than 9,800 retail locations and about 1,100 walk-in medical clinics, as well as around 93 million plan members. 

With 11,200-plus stores under 55 banners in 27 countries and ecommerce websites, employing more than 2.2 million associates worldwide, Bentonville, Ark.-based Walmart is No. 1 on Progressive Grocer’s 2018 Super 50 list of the top grocers in the United States. The company operates more than 4,700 U.S. locations with pharmacies across urban, rural and suburban areas.