Kroger Pharmacies (all divisions) to stop accepting Express Scripts 1/1/23

[storewanderer]

This it appears will cost Kroger about 10% of its pharmacy business. Obviously more/less depending on market.

Safeway/Albertsons is one of the places that will still accept Express Scripts... so here we have yet ANOTHER issue with this merger...

This brings back some memories. Not good ones. Back in 2012, on January 1, Walgreens stopped accepting Express Scripts due to a similar dispute. Walgreens had been a very stable company prior to that time, with stable management, low-no debt, and expanding quickly. This move cost Walgreens about $4 billion in revenue and within about six months by July 2012, Walgreens started accepting Express Scripts again. Stock price fell and it was clear this was not a good move for them. Then in August 2012, Alliance Boots purchased 45% of Walgreens and of course since then after they officially merged Boots in during 2014, Walgreens has been quite a mess, a revolving door of management, is no longer debt free, etc.

[rwsandiego]

... in August 2012, Alliance Boots purchased 45% of Walgreens and of course since then after they officially merged Boots in during 2014,...

Actually, it was Walgreens who acquired 45% of Alliance-Boots in 2012. They acquired the remaining 55% in 2014. From the press release:

"...Walgreens and Alliance Boots announced their two-step strategic transaction in June 2012. They completed Step 1 in August 2012, when Walgreens invested approximately $4.0 billion in cash and 83.4 million shares of its common stock in exchange for a 45 percent equity ownership stake in Alliance Boots. With today’s announcement of the completion of Step 2, Walgreens has acquired the remaining 55 percent of Alliance Boots in exchange for approximately $5.3 billion in cash and 144.3 million shares of stock..."

And the story from The Chicago Tribune."

After acquiring the remaining 55% of Alliance-Boots' shares, a holding company called Walgreens Boots Alliance was formed. The company is based in Deerfield, Illinois where Walgreens already had its corporate headquarters.

WBA later sold Alliance to AmerisourceBergen.

[Knight]

Is Cigna, the parent company of Express Scripts, accepted at Kroger's pharmacies?

[storewanderer]

... in August 2012, Alliance Boots purchased 45% of Walgreens and of course since then after they officially merged Boots in during 2014,...

Actually, it was Walgreens who acquired 45% of Alliance-Boots in 2012. They acquired the remaining 55% in 2014. From the press release:

"...Walgreens and Alliance Boots announced their two-step strategic transaction in June 2012. They completed Step 1 in August 2012, when Walgreens invested approximately $4.0 billion in cash and 83.4 million shares of its common stock in exchange for a 45 percent equity ownership stake in Alliance Boots. With today’s announcement of the completion of Step 2, Walgreens has acquired the remaining 55 percent of Alliance Boots in exchange for approximately $5.3 billion in cash and 144.3 million shares of stock..."

And the story from The Chicago Tribune."

After acquiring the remaining 55% of Alliance-Boots' shares, a holding company called Walgreens Boots Alliance was formed. The company is based in Deerfield, Illinois where Walgreens already had its corporate headquarters.

WBA later sold Alliance to AmerisourceBergen.

Based on the way things went down, it was on paper that way, but the way the control went, it was the Boots people calling the shots and designing the whole thing.

Why the Walgreens management in 2012 went along with this, I will never know. It was an unfortunate decision.

https://www.sec.gov/Archives/edgar/data ... dex992.htm

[storewanderer]

Is Cigna, the parent company of Express Scripts, accepted at Kroger's pharmacies?

Not sure, the article I read referred strictly to Express Scripts. It also noted quite a bit of Express Scripts cards are issued to folks who buy insurance on the Affordable Care Act Marketplace. Express Scripts is still accepted by Rite Aid, Safeway/Albertsons, Wal Mart, CVS, and Walgreens, among various regional grocers.

Not sure what happened with Kroger. Hopefully this won't be another debacle like their decision to stop accepting Visa cards at Smiths. And this certainly is going to be a topic of conversation regarding the upcoming Safeway/Albertsons merger because it will reduce pharmacy access to Express Scripts customers Kroger has displaced if this same policy is implemented after the merger at Safeway/Albertsons.

[Alpha8472]

When Walgreens stopped accepting Express Scripts years ago, it drastically increased pharmacy business at other pharmacy chains. Those customers brought in a ton of business to other pharmacies. Once people switch pharmacies, it is difficult to get them to come back. Once a customer has a negative experience such as rejecting a person's insurance it leaves a lasting impression.

Kroger will definitely see fewer sales in other parts of the store.

[bryceleinan]

There is one major loser in this decision: military members and their families on TRICARE. They already lost access to Walmart/Sam's, and now Kroger got the boot. In some areas (like where I live in Northern Nevada), a Kroger-owned pharmacy is the only name in town. Some large employers (State of Nevada being one) also lose too. I now have to schlepp on over to a pharmacy 30 miles away for my prescriptions because of this decision, since my employer's contract with ESI prohibits Walgreens and CVS.

Biggest things is the reimbursement rate... pharmacies lose money filling ESI scripts.

[storewanderer]

There is one major loser in this decision: military members and their families on TRICARE. They already lost access to Walmart/Sam's, and now Kroger got the boot. In some areas (like where I live in Northern Nevada), a Kroger-owned pharmacy is the only name in town. Some large employers (State of Nevada being one) also lose too. I now have to schlepp on over to a pharmacy 30 miles away for my prescriptions because of this decision, since my employer's contract with ESI prohibits Walgreens and CVS.

Biggest things is the reimbursement rate... pharmacies lose money filling ESI scripts.

So where can State of Nevada employees fill in Carson City after this takes place? Raleys...? Costco? Pretty bad... could be a great entry point for Rite Aid, too bad they are so lost right now. By the time Rite Aid figures out a way to open the dispute with Kroger would be resolved.

[bryceleinan]

There is one major loser in this decision: military members and their families on TRICARE. They already lost access to Walmart/Sam's, and now Kroger got the boot. In some areas (like where I live in Northern Nevada), a Kroger-owned pharmacy is the only name in town. Some large employers (State of Nevada being one) also lose too. I now have to schlepp on over to a pharmacy 30 miles away for my prescriptions because of this decision, since my employer's contract with ESI prohibits Walgreens and CVS.

Biggest things is the reimbursement rate... pharmacies lose money filling ESI scripts.

So where can State of Nevada employees fill in Carson City after this takes place? Raleys...? Costco? Pretty bad... could be a great entry point for Rite Aid, too bad they are so lost right now. By the time Rite Aid figures out a way to open the dispute with Kroger would be resolved.

Walmart (for the time being), Raley’s (while they still have a pharmacy), Costco, Wrong Aid, and Safeway are it.

[storewanderer]

Walmart (for the time being), Raley’s (while they still have a pharmacy), Costco, Wrong Aid, and Safeway are it.

Some CVS people told me they are getting a lot of transfer requests the past week from people who used to use Smiths. Does CVS accept some of the State insurance plans now? There seems to be a lot of confusion. I wonder if Smiths is losing more prescriptions than just the Express Scripts ones due to customer confusion about what is going on, or losing an entire household's prescriptions if one household member is on Express Scripts just so the household can get all of their prescriptions at the same place.

The CVS in North Carson is noticeably less busy than other CVS units if you must use a CVS for some reason... it also closes when it feels like it, not based on posted hours, so not always reliable at night.