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Walgreens and TRICARE Pharmacy remains out of the TRICARE retail network.


W


algreens left the TRICARE retail network when its contract with Express Scripts


Inc. expired at the end of 2011. Though Walgreens is the largest pharmacy chain in the country, the TRICARE pharmacy network still has more than 57,000 drug stores across the nation — more than the combined number of McDonald’s and Starbucks stores. Since Walgreens’ departure, TRICARE pharmacy contractor Express Scripts has been monitoring the effects on beneficiary satisfaction and access to other retail and community pharmacies and has experi- enced relatively few complaints from for- mer Walgreens customers. In August, Walgreens announced plans to get back with Express Scripts, having lost millions in business since the breakup. Many — including MOAA — thought that meant Walgreens would be rejoining the TRICARE network soon. Not so fast. In September, Express Scripts an- nounced that while it will partner with Walgreens on some of its other programs, Walgreens won’t be readmitted to the TRICARE pharmacy network. MOAA’s sources indicate the decision


was based on several factors, including the relative lack of customer complaints about Walgreens’ departure from the TRICARE network and the broad availability of other retail alternatives. But the key driver is money. Other pharmacies have offered new


network discounts that have yielded bigger savings for Express Scripts and TRICARE.


44 MILITARY OFFICER NOVEMBER 2012 Use of the TRICARE mail-order phar-


macy system has risen 25 percent, and retail pharmacy use has declined 8 per- cent versus a similar period for 2011. This indicates many of the former Walgreens customers began trying that venue, which is much cheaper for DoD. Under those circumstances, the concern


was that readmitting Walgreens would end up raising TRICARE pharmacy costs. While the math is understandable from


DoD’s standpoint, these new windfall savings only raise new questions about Pentagon efforts to impose steep copay- ment increases on beneficiaries because of allegedly “skyrocketing costs.”


MO


— Contributors are Col. Steve Strobridge, USAF- Ret., direc tor; Col. Mike Hayden, USAF-Ret.; Col. Bob Norton, USA-Ret.; Cmdr. René Campos, USN- Ret.; Capt. Kathy Beasley, USN-Ret.; Col. Phil Odom, USAF-Ret.; Karen Golden; Matt Murphy; and Jamie Naughton, MOAA’s Government Relations Depart- ment. To subscribe to MOAA’s Legislative Update, visit www.moaa.org/email.


ANSWERS to the “How Much Do You Know?” quiz: Question 1: B. COLAs account for 50 percent of lifetime retired pay, based on a 42-year-old retiree receiving a 3-percent COLA annually (as the DoD actuary assumes) and living until age 84. Question 2: C. The average age of a regular or disability officer retiree retiring in FY 2011 was 46.7, and 41.2 for enlisted retirements. If you include newly retiring reservists, the average ages jump to 52.0 and 48.7, respectively. Question 3: B. According to the DoD actuary, a 65-year-old military retiree is expected to live an additional 17.1 years. Question 4: A. According to the DoD Actuary, $1.15 million is the lump-sum amount that would have to be invested in today’s treasury bonds to be able to fund the O-5’s same monthly retired pay checks, with 3-percent annual COLAs, for the rest of his or her expected lifetime. Question 5: B. 5.4 percent, or 110,807 out of a total of 2.036 million, military retirees are women. Question 6: C. Almost 53 percent of TFL spend- ing goes toward pharmacy costs. Medicare is first- payer for hospitals stays and doctor visits, so TFL pays only 20 percent of those costs.


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