December 30, 2011 / 7:03 PM / 6 years ago

Walgreen preps customers for loss of Express Scripts

(Reuters) - Walgreen Co WAG.N said on Friday it will increase staffing at its call centers and offer discounts as it tries to hang on to customers once it stops filling prescriptions for Express Scripts Inc (ESRX.O) members on Sunday.

Walgreen has been battling with the pharmacy benefits manager (PBM) since June 21, when Walgreen said the companies could not agree on terms for a new contract. The current contract expires on Saturday.

The top U.S. drugstore chain, which operates 7,810 locations, is offering discounts next month on an annual membership fee and giving coupons to some Express Scripts members to keep them from defecting to rivals such as CVS Caremark Corp (CVS.N) and Rite Aid Corp (RAD.N).

Those chains, and others like Wal-Mart Stores Inc (WMT.N), have been courting Walgreen customers. On Thursday, Supervalu Inc’s (SVU.N) Jewel Osco chain said it was beefing up its pharmacy services to welcome Express Scripts members who will no longer be accepted at Walgreen.

Walgreen claimed that about 120 Express Scripts health plans, employers and other clients have either switched PBMs or taken steps so that members could maintain access to Walgreen’s stores. Last week it had said that number was about 100.

But Express Scripts said only a handful of clients have actually made the switch.

The PBM said it remained open to reaching an agreement with Walgreen, which said it made a “serious attempt” in mid December to patch up their differences.

“We would love to have Walgreens in our network at rates and terms that are right for our clients,” Express Scripts spokesman Brian Henry said in response to the Walgreen statement on Friday.

Henry said Express Scripts has more than 56,000 pharmacies in its network, excluding Walgreen.

Last fiscal year, Express Scripts processed 88 million prescriptions filled by Walgreen, representing $5.3 billion in Walgreen’s sales. Walgreen said in a regulatory filing on Thursday it would mitigate some of the expected loss in business through cost-cutting.

The increased staffing at the company’s call centers is aimed at helping Express Scripts members find a way to still be able to fill prescriptions at Walgreen.

Reporting By Phil Wahba in New York, additional reporting by Lewis Krauskopf; Editing by Gerald E. McCormick

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