Walgreens cries foul over BlueCross business

Tuesday, August 5, 2008 at 10:07pm
Walgreens is claiming, in a lawsuit filed Tuesday, Caremark engaged in unfair trade practices.

As the latest move in a continued bout of head-butting, Walgreens, the nation’s largest drugstore chain, has filed a lawsuit in Tennessee’s Middle District Court accusing pharmacy benefits manager Caremark of unfair trade practices.

The lawsuit claims that Caremark Rx — Nashville’s largest publicly traded company until it was bought by Rhode Island-based CVS Corp. — has tried to block Walgreens from taking part in BlueCross BlueShield of Tennessee’s mail order and specialty pharmacy networks.

In 2005, Walgreens sent a letter to BlueCross asking to participate in the networks on the same terms as others providers. At the time, Caremark both administered BlueCross’ mail-order network and was a preferred provider in the insurer’s specialty pharmacy network. The complaint alleges that BlueCross instructed Caremark to provide Walgreens with the terms of its own participation.

According to Walgreens, Caremark refused and instead “pursued a scheme to deny Walgreens its statutory right to join the BCBST networks on the same terms and conditions offered to and agreed to by Caremark.”

The lawsuit goes on to accuse Caremark of “directing and collaborating with BCBST to devise procedural hurdles for participation in BCBST’s specialty network to which Caremark was not subject.” Walgreens also says Caremark similarly encouraged BCBST to set “pretextual terms and conditions of participation in BCBST’s mail-order network designed to preserve Caremark’s exclusive arrangement.”

Walgreens is asking for a jury trial to determine compensatory and punitive damages.

This is not the first punch thrown in this heavyweight fight. Late last year, a unit of CVS Caremark sued Walgreens, claiming the drugstore giant canceled contracts to fill prescriptions for 70,000 members of its drug plan.

Walgreens’ recent complaint was filed by Steve Riley, Greg Reynolds and Jim Bowen, all attorneys from local litigation shop Riley Warnock & Jacobson.

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