Kroger seeks to end deal with Cigna’s Express Scripts over drug pricing

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FILE PHOTO: The Kroger supermarket chain's headquarters is shown in Cincinnati

(Reuters) – Grocery retailer Kroger Co said on Friday it has sent Cigna Corp’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.

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.

Cigna bought Express Scripts in 2018 in a $54-billion deal, creating one of the biggest providers of pharmacy benefits and insurance plans in the United States.

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(Reporting by Mrinalika Roy in Bengaluru; Editing by Shailesh Kuber)