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Express Scripts and Walgreens: Status Update

July 19, 2012

Express Scripts and Walgreens

Express Scripts Retail Network

I'd like to update you on the current situation regarding Express Scripts and Walgreens.

While Walgreens is spending a great amount of time and money positioning its exit from our network, the facts remain the same:

  • Walgreens' offer would have made them a high-cost provider.
  • It unilaterally decided to leave the Express Scripts pharmacy network.
  • Our plan sponsors and members have easily switched to other convenient, lower-cost pharmacy options.

Walgreens Wants a Premium for Doing What Other Pharmacies Do at a Lower Cost

Walgreens' rates and terms would have made it the highest-cost pharmacy in our networks. They also wanted the right to terminate our individual plan sponsors, unreasonably limit our audit rights, and dictate plan design decisions for plan sponsors. That is contrary to what our plan sponsors want in a high-quality, low-cost pharmacy benefit.

Walgreens Still Has Not Produced an Acceptable Offer

Last June, Walgreens publically announced that it would leave the Express Scripts network on Jan. 1, 2012. Since Walgreens has not produced an acceptable offer, they are not currently in the Express Scripts network. We remain open to including them in our network, but only at acceptable terms.

The good news for members is that, on average, there is another in-network pharmacy within a half mile of a Walgreens pharmacy. Nationally, pharmacy access is nearly identical with or without Walgreens, as illustrated below.

Exhibit A: National Network Access Coverage With and Without Walgreens1
With Walgreens Without Walgreens
Urban:99.9% Urban:99.9%
Suburban:99.9% Suburban:99.9%
Rural:97.9% Rural:97.9%

1Calculations are based on the industry standard of one pharmacy within 3 miles for urban, one pharmacy within 5 miles for suburban and one pharmacy within 10 miles for rural, providing a pharmacy exists. Walgreens stores include affiliates Duane Reade, Happy Harry's and OptionCare.

Plan Sponsors and Members Have Moved On Easily

We have worked diligently since last June to ensure a smooth pharmacy transition for our members. To date, over 95% of our prescription volume has moved forward without Walgreens in the network with minimal member noise. Pharmacy access and quality service without Walgreens is simply not an issue.

Client Feedback is Overwhelmingly Positive

Here's a sample of our clients' feedback regarding the communications and support they've received during the transition.

"At any retail pharmacy, a patient is going to get the exact same medicine, exact same dosage, and exact same quantity. It's as easy as leaving the Walgreens parking lot and going across the street to another pharmacy..." Health Plan with 140,000 members
"If Walgreens returns, we will not be adding them back unless the state forces us." Health Plan with 200,000 members
"The transition has gone very well for our employees. Express Scripts has been very proactive and has kept us well informed. At every point of contact, Express Scripts has made the process easy." Technology Company with 33,000 members

We're Confident about the Future

During this time, we've also gained and implemented many new plan sponsors who saw no need for Walgreens in the network. These new plan sponsors include a public employer (200,000 members), a consumer products company (20,000 members), a national retailer (12,000 members), a national hotel chain (40,000 members), a regional grocer (9,000 members), a regional bank (68,000 members), and a regional health plan (193,000 members).

At Express Scripts, we are committed to keeping prescription drugs affordable and broadly accessible.

Thank you for your interest and continued support.

© 2012 Express Scripts, Inc. All Rights Reserved.

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