• Chicago Tribune, Tuesday, June 8, 2010 10:44 AM

Walgreens says it is ending its relationship with competitor CVS Caremark's pharmacy benefits management business over the next three years because of problems it has with both prices and policies. But some analysts see the announcement as a ploy.

"We believe Walgreens' actions represent a negotiating tactic, albeit a very aggressive one, to garner increased reimbursement from Caremark," Bernstein Research analysts say. "Reimbursement from Caremark represents 7% of Walgreens' total revenue of approximately $4.6 billion."

Walgreens cites examples such as CVS' promotion of prescription drug plans for patients with chronic conditions that requires it to use CVS pharmacies or Caremark mail service, and says it receives little information when CVS transfers drug plans to a new network. It also says Caremark's reimbursement rates to Walgreens are increasingly unpredictable. CVS says it's "surprised and disappointed" by the decision and is open to additional talks.

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