Walmart to pull pharmacies from CVS Health network

Walmart
Walmart and CVS are sparring over reimbursement rates at the pharmacy counter. (Walmart)

The Walmart and CVS Health rift just got real.

The two companies have been sparring over reimbursement rates. The Wall Street Journal first reported Walmart's plans to leave the CVS Caremark pharmacy benefit management (PBM) commercial and Managed Medicaid retail pharmacy networks as early as February.

The impact: Consumers who get CVS drug benefits through their employers or Medicaid will no longer be able to pick up their prescriptions at the retail giant.

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CVS Health announced it was pushing Walmart to stick around through April. Both companies have indicated they may still be open to finding a solution that would prevent the split.

But it looks like there's a long way to go to make that happen.

"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," said Derica Rice, president of CVS Caremark, the PBM business of CVS Health, in a statement. "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 also said less than 5% of affected CVS Caremark members use Walmart exclusively to fill their prescriptions and said there are more than 63,000 other pharmacies that will remain in the CVS Caremark national pharmacy network.

As Axios' Bob Herman reported, Walmart took a jab at CVS' business practices with a statement about its PBM. "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," they told him. "Walmart is standing up to CVS's behaviors that are putting pressure on pharmacies and disrupting patient care."

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