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Walmart Out, CVS In: Changes Coming to Tricare's Pharmacy Network

Patricia Kime - 10/24/2021

After three years, Walmart is leaving Tricare's pharmacy network -- a departure that pharmacy benefit manager Express Scripts says is a result of the retail giant's reluctance to offer "more highly competitive discounts" to military health beneficiaries.

At the same time CVS Pharmacy will return to the Tricare network after a five-year hiatus, a change Express Scripts spokeswoman Jennifer Luddy said Wednesday would expand choice within the network.

Effective Dec. 15, 2021, Walmart and Sam's Club will no longer be a part of the Tricare pharmacy network, and CVS will be included among the list of network retail pharmacies where Tricare users can fill their prescriptions.

"This change provides more competitive rates for the Tricare pharmacy benefit and expands quality, convenient pharmacy choices nationwide," Luddy said in a statement to Military.com.

Walmart and Sam's Club have more than 5,300 locations nationwide, according to Walmart's website.

Walmart joined the Express Scripts network in 2018, signing a three-year contract to provide prescription services to the pharmacy benefit management company's clients, including Tricare and the Defense Health Agency.

The contract expires in December and Walmart and Sam’s Club will be removed from the network, Luddy said. Walmart did not return a request for comment by publication.

Meanwhile, CVS, a company that left the Tricare network in 2016, also after negotiations failed, will return to the network, giving beneficiaries access to its nearly 10,000 pharmacy locations, including inside many Target stores.

Under the agreement, as of Dec. 15, all prescriptions filled at a Walmart will be considered non-network. Beneficiaries will have to pay the full cost of their medication up front and file a claim with Tricare for partial reimbursement.

Having access to Walmart pharmacies has been especially convenient to military families who live in rural or remote areas that may lack a chain pharmacy. But Luddy said Walmart "declined several opportunities to offer more highly competitive discounts to continue to serve Tricare beneficiaries."

As a pharmacy benefit manager, Express Scripts serves as somewhat of a middleman, overseeing the Defense Health Agency's pharmacy program, determining the reimbursement rates to retail pharmacies that fill patient prescriptions, and billing the government in turn.

It also is responsible for transactions involving the government purchase of medicines for military installations and provides the Tricare mail-order pharmacy program.

In the past decade, the Defense Health Agency has increasingly encouraged -- and in some cases, required -- beneficiaries to fill their prescriptions at no cost at military pharmacies or use the mail-order system to fill long-term prescriptions at lower cost.

Pharmacy copays have risen substantially over the past 10 years, in large part due to cost but also as required by Congress as part of a cost-cutting measure to the defense medical budget.

In 2011, 30-day prescriptions of generic medications and brand-name drugs could be purchased at a network pharmacy for $3 and $9 copayments, respectively, while medications not in Tricare's formulary cost $22.

The mail-order system offered generic medications at no cost and brand-name formulary drugs for a $9 copayment for 90-day prescriptions.

This year, Tricare beneficiaries pay $11 for a 30-day supply for a generic drug and $33 for a brand-name medication at retail pharmacies. Non-formulary drugs not listed in Tricare's list of covered medications cost $60.

Copayments for the mail-order pharmacy run $10 for a generic prescription and $29 a brand-name drug for a 90-day script. And the rates are expected to rise next year.

Luddy said that Express Scripts will be reaching out to patients who take specialty medications to help them transfer their prescriptions without a gap in coverage.

According to Express Scripts, the Tricare pharmacy network covers 56,000 stores, including chains such as Walgreens and Rite Aid and supermarkets like Kroger and Publix.

Tricare provides coverage to 9.6 million beneficiaries worldwide.

--Patricia Kime can be reached at Patricia.Kime@Military.com. Follow her on Twitter @patriciakime.