Walgreen Co. (WAG: Quote) and Express Scripts Holding Co. (ESRX: Quote) announced a multi-year pharmacy network agreement on Thursday, which settles a dispute between the two firms running for months. Terms of the new contract were not disclosed. Walgreen shares are surging in pre-market trading.
The agreement includes rates and terms under which Walgreens will participate in the broadest Express Scripts retail pharmacy network available to new and existing clients.
Walgreens will be back in the Express Scripts system on September 15.
Greg Wasson, CEO of Walgreens, said, "I am pleased that Walgreens and Express Scripts have been able to reach an agreement that works for both parties and is consistent with our company's principles...We look forward to once again filling prescriptions and offering our health and wellness services as part of the Express Scripts network."
The previous agreement between the two companies had ended at the beginning of this year as the drugstore chain reportedly demanded a premium compared to what Express Scripts was giving other firms. However, the exit from the agreement hit Walgreen sales badly.
In order to mitigate the impact of the contract exit, Walgreen last month said it would invest about $6.7 billion in cash and stock in exchange for a 45 percent equity ownership stake in pharmacy-led health and beauty group Alliance Boots GmbH.
Early this year, the drugstore chain agreed to buy certain assets of BioScrip Inc.'s (BIOS) community specialty pharmacies and centralized specialty and mail service pharmacy businesses for $225 million.
WAG is surging over 12 percent pre-market activity and is at $34.76.
ESRX, which closed at $57.69 on Wednesday, is up over 2 percent in pre-market activity.
Shares of rival CVS Caremark Corp. (CVS) are falling over 5 percent at $46.00.
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by RTT Staff Writer
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