USA Express Scripts Eyes Forming Alcohol and Tobacco Free Pharmacy Networks

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USA

Express Scripts, the nation’s largest pharmacy benefits manager, is surveying pharmacy owners about creating a network of outlets that do not sell tobacco products or alcohol.

A spokesman confirms that information is being gathered, but no decision has been made on whether a network will be created or if customers will be charged extra co-payments for visiting a pharmacy that sells such products.

Express Scripts Eyes Forming Alcohol and Tobacco-Free Pharmacy Networks
 
Express Scripts, the nation’s largest pharmacy benefits manager, is surveying pharmacy owners about creating a network of outlets that do not sell tobacco products or alcohol. A spokesman confirms that information is being gathered, but no decision has been made on whether a network will be created or if customers will be charged extra co-payments for visiting a pharmacy that sells such products.

The move comes after the Caremark pharmacy benefits manager agreed to create pharmacy networks that will charge customers an extra co-payment for filling prescriptions at any drug store that sells tobacco products. The move could help CVS CVS +2.38%, which owns Caremark, compensate for an estimated $2 billion in revenue that may be lost now that its own pharmacies stopped selling tobacco products.

In explaining its decision, Caremark maintained some of its clients expressed interest in creating tobacco-free networks. The city of Philadelphia signed such a contract for its non-u nion employees, who will be charged an added $15 co-payment as of January first if they fill prescriptions at pharmacies that sell tobacco products, including such CVS rivals as Walgreen and RiteAid.

“Some clients have inquired about creating networks that include pharmacies that do not sell tobacco or alcohol,” the Express Scripts spokesman tells us. “We regularly survey our retail pharmacy partners on many topics and we are doing so now. At this point, we are gathering information.” He adds that Express Scripts is looking to provide “better clinical outcomes in the most cost-effective way possible.”

Of course, if Express Scripts “forms a ‘no-sin network,’ then it would mute any competitive benefit for Caremark,” says Adam Fein of Pembroke Consulting, who tracks pharmacy distribution. He adds that such moves are, essentially, a twist on existing benefits plans that offer what are called narrow networks of pharmacies, which seek to impose criteria on pharmacy participation.

At the same time, a “no-sin network” could be disruptive, and both Caremark and Express Scripts may encounter apathy or resistance from clients and consumers. Pharmacy benefits managers and their clients “will face a marketing controversy when people who don’t smoke or drink are forced to pay the higher co-pay simply because their pharmacy sells tobacco or alcohol to someone else,” says Fein.

To what extent an Express Scripts ‘no-sin network’ may complicate matters for CVS is unclear. Although the 7,700 CVS pharmacies no longer sell tobacco products, some do sell alcohol, at least in certain states. So if Express Scripts were to form ‘no-sin networks,’ some CVS pharmacies may be excluded, just as CVS rivals that sell tobacco would be excluded from Caremark tobacco-free networks.

 

Originally written By: ED SILVERMAN

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