Kroger Contracts with Prime Therapeutics, Replacing Express Scripts

The Kroger Co. (Kroger) sent Cigna’s subsidiary Express Scripts a written notice of its plan to terminate their pharmacy provider agreement for commercial customers due to an “unsustainable” pricing model, Reuters reported in September 2022.

Kroger said it has made several attempts since February to negotiate with the pharmacy benefit manager for 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.”

Kroger said more than 90% of Kroger Health’s customers will not be affected by a termination of the deal, but if a new agreement is not reached by Dec. 31, most Express Scripts’ commercial customers won’t be able to fill prescriptions at Kroger stores.

As a result of the dispute, Kroger and Prime Therapeutics (Prime) announced a direct agreement for the Kroger Family of Pharmacies to remain in-network effective January 1, 2023.

The direct agreement with Prime will prevent disruption to Prime’s Medicare Part D members mitigating the end of year Kroger termination with Express Scripts while continuing health access, delivering pricing transparency and helping to ensure affordable prices.

The Kroger Family of Pharmacies remains in-network for Prime’s Medicare Part D Plan clients and nearly all national and regional Medicare Part D plans.

While the Kroger Family of Pharmacies will not be in the ESI network for 2023, it continues to participate in many other pharmacy benefit networks, for example the Prime network.  In addition, people may continue to fill prescriptions at Kroger Family of Pharmacies through other options.

Kroger Health encompasses over 22,000 health practitioners—from pharmacists and nurse practitioners to dietitians and technicians—and operates 2,200-plus pharmacies under nearly 20 banners and over 225 Little Clinics in 35 states.

Takeaway: Kroger’s contract termination with Express Scripts is expected to reduce sales by about $100 million in Kroger’s fiscal fourth quarter.