DOW JONES NEWSWIRES
Walgreen Co. (WAG) said it signed up nearly 125,000 customers for its prescription savings club drug discount program in the first week of the year, as the drugstore chain works to preserve its customer base after leaving pharmacy-benefits manager Express Scripts Inc.'s (ESRX) network.
A conflict between Walgreen and Express Scripts over new contract terms erupted publicly in June, when Walgreen said it wouldn't be part of the pharmacy-benefits manager's network when their deal expired in 2011. The benefit manager's clients now have to go elsewhere to fill prescriptions. Several Walgreen rivals have promoted their affiliation with Express Scripts to try pulling in new customers, and CVS Caremark Corp. (CVS) and Rite Aid Corp. (RAD) were expected to gain from Walgreen's exit.
Walgreen said many pharmacy customer who have prescription insurance plans managed by Express Scripts are signing up for the drug discount program as they look for alternatives to continue filling their prescriptions at Walgreen stores. The Walgreen program offers discounts on more than 8,000 brand name and all generic medications.
Walgreen said it was offering a promotion in January on yearlong memberships, saying it hoped to allow Express Scripts network customers to use Walgreen when possible or make a smooth transition to another pharmacy.
The drugstore chain said it is continuing to work with employers, health plans and pharmacy benefit managers looking to maintain access to Walgreen pharmacies.
Based on current estimates, Walgreen has said it expects to achieve 97% to 99% of its fiscal 2011 prescription volume, despite leaving Express Scripts' network.
Last month, Walgreen said its fiscal first-quarter earnings fell on higher costs.
Shares were trading down 5 cents at $33.03 in early trading. The stock is down 1.3% over the past three months.
--By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; email@example.com