Deerfield-based Walgreens says a new deal with the Express Scripts Inc. pharmacy network is unlikely.
Losing the deal with Express Scripts, a low-cost drug insurance program, will mean a loss of about $5 billion in business, MarketWatch.com reported.
Already, apprehension about the deal and a slow start to the flu season drove Walgreen Co's fiscal first-quarter earnings down more than 4 percent.
Walgreens maintains it would consider a reasonable offer from Express Scripts but reported no progress in negotiations. A three-year contract between the companies ends Dec. 31, and since June, Walgreen and Express Scripts have said they were preparing to stop doing business, jeopardizing billions of dollars in sales for Walgreen.
The company gets $5.3 billion in annual revenue from Express Scripts, which pays Walgreen and other drugstores to fill prescriptions. But it said it would rather give up that revenue than continue filling unprofitable prescriptions.
“While we remain open to any fair and competitive offer from Express Scripts, we firmly believe that accepting their proposal was not in the best long-term interests of our shareholders,” Walgreen CEO Greg Wasson said in a statement.
Walgreen -- with its 7,812 drugstores nationwide -- is trying to keep as many of those prescriptions as possible by making its own arrangements with companies and health plans. The company says it expects to keep 97 to 99 percent of its fiscal 2011 prescription volume in the new fiscal year, but analysts say Walgreen will lose most of the Express Scripts prescriptions.
Separately, Express Scripts also is trying to buy Medco Health Solutions Inc., another large pharmacy benefits manager. If
Separately, Medco Health Solutions Inc shareholders overwhelmingly approved a plan for the company to be sold to Express Scripts. That deal may result in Walgreens losing Medco’s clients over time.
Competitors CVS and Rite Aid have stepped up their attempts to lure customers away from Walgreens, the nation’s largest drugstore chain.