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Walgreen halts four Caremark drug plans

01:00 AM EST on Friday, November 30, 2007

By Joseph Galante

Bloomberg News

The Walgreen Co., the largest U.S. drugstore chain by revenue, says it has stopped filling prescriptions for members of four CVS Caremark Corp. benefit plans.

Woonsocket-based CVS, which bought prescription-plan administrator Caremark RX in March, sued Walgreen this month after Walgreen said it would stop honoring the CVS plans because of low payment rates. Walgreen had been filling Caremark prescriptions for six years.

Walgreen said CVS was not paying enough to fill prescriptions for four companies’ employee health plans. A judge temporarily barred Walgreen from terminating its contract earlier this month after CVS said doing so would irreparably harm 70,000 of its customers if they were suddenly unable to have their prescriptions filled.

The companies affected are Luxembourg-based steelmaker ArcelorMittal, which has Chicago offices; Milwaukee-based car-battery maker Johnson Controls Inc.; Mayfield Village, Ohio-based Progressive Corp.’s Progressive Casualty Insurance Co. and the Wisconsin Education Association Trust, which provides health insurance and other benefits for public school employees.

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