Nearly 15,000 independent pharmacies will have a chance to rejoin the Tricare retail pharmacy network, according to officials with Express Scripts.
The move comes in response to the Kroger grocery chain’s Sept. 30 announcement that its 2,200 pharmacies in 35 states would no longer participate in the Tricare provider network, officials said.
Express Scripts will send a notice announcing a December contract solicitation directly to the pharmacies that either declined the recent contract or are affiliated with a wholesaler that declined the contract on their behalf. If the pharmacy accepts the contract, it will be able to rejoin the Tricare network effective Jan. 15.
Until Oct. 24, there were roughly 55,586 retail pharmacies in the Tricare network but, as of that date, 14,963 dropped out. The reduction in pharmacies affects an estimated 400,000 Tricare beneficiaries, according to the National Community Pharmacists Association. Lawmakers and advocates have raised questions about the effect on beneficiaries, especially those in rural areas.
“We constantly evaluate ways to improve access and choice for those we serve, so as a result of Kroger’s recent notice that they will no longer participate in the Tricare pharmacy network, independent pharmacies that declined our previous invitation will be given another chance to consider participating,” said Tom Jenkins, Express Scripts’ vice president of account management for DoD programs, in a statement provided to Military Times.
Beneficiaries who continue to use pharmacies that are no longer in the Tricare retail pharmacy network will pay full price for their medications, then file for reimbursement, which is subject to the deductible as well as a higher out-of-network cost share.
“Even without Kroger’s participation, nearly all Tricare beneficiaries have an in-network pharmacy within a 15-minute drive of their home, but we are always working to provide more choice to our members and look forward to welcoming additional independent pharmacies back into the network,” Jenkins stated.
Kroger announced that the Express Scripts drug pricing model is “unsustainable” for Kroger and customers and that unless a new agreement is reached by Dec. 31, most Express Scripts customers around the country will no longer be able to fill prescriptions at its stores. According to the Tricare website, Kroger was still in the network as of Nov. 14.
Reimbursement rates have been the key issue for the independent pharmacies, too. However, many of the community pharmacies never even received the proposed contract for the 2023 retail network, which Express Scripts sent by fax, according to the National Community Pharmacists Association. These pharmacies therefore had no opportunity to remain in the network. Express Scripts terminated contracts early for the pharmacies participating in the 2022 network — Oct. 24. While Tricare beneficiaries received letters about the change, many pharmacies learned about the change only from their patients.
Information was not immediately available from Express Scripts about whether any rates or terms will change in the new contracts being offered. More than 7,000 independent pharmacies accepted the proposed 2023 rates earlier this year.
“Cigna/Express Scripts offered contract terms to these independent pharmacies that were far below medication acquisition costs, forcing most independent community pharmacies to make the difficult choice to reject the terms, with no opportunity to renegotiate,” wrote B. Douglas Hoey, CEO of the pharmacists association, in a letter to Secretary of Defense Lloyd Austin.
Kroger officials echoed the same concerns.
“Since February, Kroger has attempted on dozens of occasions to negotiate in good faith with [Express Scripts Inc.], seeking a more equitable and fair contract that lowers cost, increases access, and delivers greater transparency — but there has been little to no progress to date,” officials said in a statement announcing the termination of their agreement.
“Kroger is doing everything possible to deliver greater value for our customers and navigate this ongoing period of record inflation. We do not believe Kroger customers should have to pay higher costs to increase Express Scripts’ profits,” said Colleen Lindholz, president of Kroger Health, in the announcement.
Earlier, Express Scripts officials told Military Times, “The terms and conditions offered to pharmacies represented our best and final rates, and aligned with the economics necessary to provide the value to the Tricare program and ensure beneficiaries have access to the best possible prices for their prescription drug needs.”