Walmart Inc has opted to end its involvement in the network of commercial and Medicaid pharmacies run by CVS Health Corp after the two companies failed to agree on pricing, CVS said on Tuesday.
Walmart sought reimbursement increases that would lead to higher costs for clients and consumers, CVS said, adding that the dispute would not affect the pharmacy networks in its Medicare plans and Walmart's Sam's Club stores.
"At a time when everyone is working hard to find ways to reduce healthcare costs, Walmart's requested rates would ultimately result in higher costs for our clients and consumers," Derica Rice, president of CVS Caremark, the company's pharmacy benefits unit, said in a statement https://cvshealth.com/newsroom/press-releases/cvs-health-announces-walmart-decision-leave-cvs-caremark-commercial-and.
CVS said it has requested Walmart to remain in its networks through April 30 and did not expect the split to impact its 2019 financial results.
Walmart spokeswoman Marilee McInnis said the retailer was continuing discussions with CVS Caremark.
"We are committed to providing value to our customers across our business, including our pharmacy, but we do not want to give that value to the middleman," the retailer said in emailed statement.
Pharmacy benefit managers (PBMs) have been in the crosshairs of the U.S. administration, which in July proposed a rule that would scale back protections currently in place that allow rebates between drug manufacturers, insurers and PBMs.
Currently, less than 5 percent of affected CVS Caremark members use Walmart exclusively to fill their prescriptions, the company said, without giving details about how many CVS members use Walmart stores otherwise.
Shares of CVS Health were down nearly 2 percent to $63.95 in trading before the opening bell.