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February 14, 2005
GM Dumps Walgreen Over Mail-Order Prescriptions
The trend among employers to require mail-order fulfillment of drug prescriptions has led to a falling out between General Motors Corp. and Walgreen Co.

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GM, as the largest private provider of health care insurance in the United States, announced Friday that it was dropping Walgreen, the largest drug store chain in the U.S., from its list of approved prescription drug providers.

At the center of the break-up is the automaker's requirement that some drugs for chronic disorders be filled by mail order, according to the Reuters news agency.

Employers and their pharmacy benefit managers increasingly require the use of mail services to cut costs. Retail pharmacies don't like it because it's much less lucrative than in-person prescription fulfillment.

Last year, Walgreen adopted a policy of not accepting mandatory mail programs to fill prescription drug orders for chronic conditions. GM, fearing that Walgreen would drop it as a client and leave the automaker scrambling to find other providers, decided to beat Walgreen to the punch, according to GM's pharmacy benefits manager, Medco Health Solutions Inc.

"Because of the way Walgreen's has acted in their public announcement that are very antagonistic toward clients that have a mail-order component in the PBM program, it has raised the anxiety level among some clients," said Jeff Simek, a spokesman for Medco.

But Michael Polzin, a spokesman for Walgreen, said his company's ban on madatory mail programs concerned new contracts onlys and did not affect existing clients such as GM.

"We're going to try to talk directly with GM to let them know some things that their PBM (Medco) is not telling them," Polzin said.

GM provides health care coverage for 1.1 million workers, retirees and their families in the United States, according to Reuters. Last year, GM spent $5.2 billion on health care in the United States, including $1.5 billion on prescription drugs.


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