WMT Walmart Inc

By Anna Wilde Mathews and Sarah Nassauer 

CVS Health Corp. and Walmart Inc. settled their fight over the cost of filling prescriptions, averting a threatened split between the health-care giant and the retail behemoth.

CVS said Monday that Walmart was expected to leave drugstore networks of its pharmacy-benefit manager, CVS Caremark. The move would have affected people whose employers have CVS Caremark-administered drug benefits, as well as Medicaid enrollees with CVS drug coverage. Their plans would have stopped paying for prescriptions filled at Walmart, one of the country's largest retail pharmacy players.

Instead, the two companies said Friday morning that they had struck a new deal to keep Walmart in CVS Caremark's networks. The companies didn't disclose terms of their agreement but said it covered multiple years.

Derica Rice, president of CVS Caremark, said in a news release that the PBM was "very pleased to have reached a mutually agreeable solution with Walmart," and that the deal achieved its priority of helping "clients and consumers lower their pharmacy costs."

Sean Slovenski, Walmart's senior vice president for health and wellness, said in the news release that the retailer was "pleased to have reached fair and equitable terms with CVS Caremark that are in the best interest of our customers, and we are glad our CVS Caremark customers will be able to continue saving money and living better."

The two companies' dispute centered around pricing, an area where PBMs like CVS Caremark are under scrutiny amid concerns about the rising cost of drugs and opaque pharmaceutical pricing methodology.

CVS Caremark said Monday that Walmart had demanded increased pay for filling prescriptions. The PBM reimburses pharmacies when shoppers with CVS Caremark prescription coverage buy medicine.

But a person familiar with Walmart's position had said Walmart didn't ask CVS to increase the amount it pays the retailer when shoppers fill a prescription. Walmart asked CVS to maintain rates at current levels, said this person.

Last week, Walmart sent a termination letter to CVS, according to people with knowledge of the matter. But even amid their hostile public posturing, both companies signaled an interest in resolving the clash.

Another battle between a pharmacy-benefit manager and a pharmacy company played out much differently in 2012. In that case, millions of Express Scripts Holding Co. customers had to switch prescriptions to different pharmacies because Walgreen Co. dropped out of the PBM's network. The clash took seven months to resolve.

Write to Anna Wilde Mathews at anna.mathews@wsj.com and Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

January 18, 2019 07:22 ET (12:22 GMT)

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