MELISSA BLOCK, HOST:
To life's many small irritations, you might add filling prescriptions. Millions of Americans may be surprised to discover that their local Walgreens or Duane Reade Pharmacy is no longer in their network. That's as of January 1st, and it's because of a contract dispute between the nation's largest drugstore chain, and the company that manages prescriptions for health insurers. Sarah Varney, of member station KQED, explains.
SARAH VARNEY, BYLINE: To figure out if you're affected by the dispute, look on the back of your insurance card. If it says Express Scripts, you can no longer fill your prescription at Walgreens - or its affiliates, like Duane Reade - under your insurance plan. Express Scripts is what's called a pharmacy benefit manager. Health insurers and others hire them to negotiate prices for drugs and oversee prescription drug programs.
Express Scripts, one of the nation's largest pharmacy benefit managers whose clients include the mega insurance giant WellPoint, had been negotiating a new contract to keep Walgreens in its network. But Express Scripts spokesman Brian Henry says the pharmacy chain was asking for too much money.
BRIAN HENRY: Their rates and terms, as they currently stand, would be as much as 20 percent more. And our clients aren't willing to pay that premium for basically, the same service that you can get at many other - thousands of other pharmacies.
VARNEY: That's a charge Walgreens adamantly denies. Michael Polzin is a Walgreens spokesman.
MICHAEL POLZIN: We did not propose any increase in our rates, so there would not be any significant savings to Express Scripts clients for excluding Walgreens from their network. So it's really a situation of all pain and no gain for their clients.
VARNEY: Health-care experts are somewhat befuddled by the standoff. Sean Brandle is a pharmacy benefit expert at the Segal Company, a New York-based employer-benefits firm. He says tussles between pharmacy chains and pharmacy benefit managers are pretty typical.
SEAN BRANDLE: There's like, this dance and at the end of it, normally, what you expect is that some kind of deal is going to be struck. But I guess in this instance, it looks like they were just too far apart.
VARNEY: Brandle says he's surprised Walgreens would walk away from so many pharmacy customers and all that in-store foot traffic. Express Scripts says of the 750 million prescriptions it processed last year, about 90 million were filled at Walgreens.
Caught in the middle of the dispute is one of the nation's largest health-insurance companies, WellPoint, and millions of its customers, like San Francisco resident David Forer. There's a Walgreens just down the street from his office, and he used to stop in weekly to pick up insulin for his daughter, who has type 1 diabetes.
DAVID FORER: They knew me on a first- name basis. They wouldn't even ask me my name when I came up; they would just go and get her prescriptions; they would ask how she was doing. And now, I can't go there anymore.
VARNEY: Forer has switched his family's prescriptions to a CVS pharmacy. But while CVS is a national chain, there just aren't as many of them on the city's streets as Walgreens.
FORER: I imagine there's going to be huge lineups now because there was very few CVSs, and so many people are going to have to switch to CVS. So this is a major inconvenience.
VARNEY: WellPoint says nationwide, there's another in-network pharmacy typically within a half a mile of a Walgreens, and the company is trying to help customers make the transition.
Pharmacy benefit expert Brandle says there could be an upside for all the headache. Brandle says Express Scripts should be able to negotiate steeper discounts with CVS and other pharmacies, since excluding Walgreens will mean more business for them.
For NPR News, I'm Sarah Varney.
BLOCK: And that story comes to us as part of a health reporting partnership with NPR, member stations and Kaiser Health News.
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