(Reuters) - CVS Health Corp CVS.N said on Tuesday Walmart Inc WMT.N is leaving its network for commercial and Medicaid prescription drug plans after the two companies failed to agree on pricing. Slideshow ( 2 images ) CVS said the dispute would not impact Walmart’s presence in its Medicare Part D pharmacy network, which according to Cowen & Co analyst Charles Rhyee was a bright spot as it represented a larger chunk of CVS’ scripts. “At a time when everyone is working hard to find ways to reduce healthcare costs, Walmart’s requested rates would ultimately result in higher costs for our clients and consumers,” Derica Rice, president of CVS Caremark, said in a statement. However, CVS said Walmart’s Sam’s Club division would remain within its pharmacy networks. Walmart spokeswoman Marilee McInnis said the retailer was continuing discussions with CVS Caremark, the company’s pharmacy benefits unit. “We are committed to providing value to our customers across our business, including our pharmacy, but we do not want to give that value to the middleman,” the retailer said in emailed statement. Pharmacy benefit managers (PBMs) have been in the crosshairs of the U.S. administration, which in July proposed a rule that would scale back protections that allow rebates between drug manufacturers, insurers and PBMs. Since then, details of the rule have not been released. Evercore ISI analyst Ross Muken said the separation indicates continuing consolidation across the complex sector and a greater push toward narrow networks. “As the dust settles, we expect further tension among the various players and large integrated players to continue to exert economic pressure on competitors,” Muken wrote in a client note. Currently, less than 5 percent of affected CVS Caremark members use Walmart exclusively to fill their prescriptions, CVS said. The drug store retailer, which completed its $69 billion acquisition of health insurer Aetna last year, said it has requested Walmart to remain in its networks through April 30 and did not expect the split to impact its 2019 financial results. Shares of CVS Health fell nearly 2 percent to $63.95, while those of Walmart rose 1 percent to $95.96.<doc-sep>Getting prescriptions filled at Walmart will soon become tougher for some people. The retail giant has decided to leave the pharmacy benefit management subsidiary CVS Caremark over a disagreement about higher reimbursement rates. This means individuals who get CVS drug benefits through their employers and Medicaid enrollees will no longer be able to get their prescriptions drugs at Walmart. CVS Health said Tuesday that it has invited Walmart to stay in its network through April 30. Unaffected are Medicare Part D enrollees and the people who fill their prescriptions at the Walmart discount warehouse chain Sam's Club, CVS said. More:Ford, VW form alliance to develop commercial vans, pickups globally for 2022 More:Jamie Dimon says shutdown could reduce economic growth to zero this quarter if it continues More:Ask HR: My boss has body odor and bad breath. What can I do about this issue? "At a time when everyone is working hard to find ways to reduce health care costs, Walmart's requested rates would ultimately result in higher costs for our clients and consumers," CVS Caremark president Derica Rice said in a statement. People impacted by this change will be notified and given information about which other of the 63,000-plus pharmacies are in-network and near them, according to CVS. Fewer than 5 percent of affected CVS Caremark members currently go only to Walmart to fill their prescriptions. Walmart said in a statement that it's dedicated to providing its customers with "accessible and affordable" healthcare. "An important way we do that is to make sure our partners are working with us in good faith to establish fair and equitable terms, so we can pass savings to our customers through everyday low prices," the company said. "But we don’t want to give that value to the middle man....Walmart is standing up to CVS’s behaviors that are putting pressure on pharmacies and disrupting patient care." The retailer said it's focusing on continuing discussions with CVS Caremark. The Walmart break-up isn't expected to have a material impact on the financial results of CVS Health in 2019, the company said. Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer<doc-sep>
Walmart is one of the largest pharmacy chains in the United States with about 4,600 locations, but CVS said that the matter will not considerably impact its financial results. Less than 5 percent of affected CVS Caremark members use only Walmart to fill their prescriptions, CVS said. Anyone with CVS-administered drug benefits and Medicaid enrollees with CVS drug coverage will be affected if the split happens, CVS said Tuesday. That means prescriptions filled at a Walmart pharmacy might not be eligible for coverage by their drug plans. Walmart pharmacies are expected to leave the drugstore networks offered by CVS because of an ongoing pricing dispute. Walmart spokeswoman Marilee McInnis said in a statement that the company is "disappointed CVS chose not to come to a resolution in a way that is beneficial to their members who are also our customers." McInnis also said that the retailer wants to pass along savings to their customers, not a middle man. For its part, CVS is placing the blame for the split on Walmart. "At a time when everyone is working hard to find ways to reduce health care costs, Walmart's requested rates would ultimately result in higher costs for our clients and consumers," said Derica Rice, president of CVS Caremark, in a statement. Rice's statement also said that CVS could not agree to Walmart's demands for an increase in reimbursement. CVS said that it has asked Walmart to stay in its networks through April 30. A person familiar with the matter told the Wall Street Journal, which first reported the story, that the split could come as early as next month if Walmart doesn't agree. Walmart said that it is still trying to find a solution that would benefit both parties and their shared customers. CVS Caremark, the pharmacy-benefits arm of CVS Health, said that if a split happens, it would not affect the pharmacy networks in its Medicare plans. Sam's Club stores would also be spared from any impact.