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Walgreen and Express Scripts throw in the towel

Some Texas companies know that after negotiations, mediations and countless other tactics, sometimes, the best option is to walk away from a business conflict. In recent business news, pharmacy benefits manager Express Scripts and drugstore operator Walgreen said they are ending their legal dispute. In particular, the two companies are dismissing their legal claims against one another.

The conflict commenced when Walgreen, which is reported as the largest U.S. drugstore chain, said that it would stop filling prescriptions for Express Scripts Holding members after a contract between the companies had expired. According to the drugstore, Express Scripts was not paying the company enough. As a result, last September, Express Scripts sued Walgreen, indicating that it was trying to lure away its customers. However, sources say that this action was a violation of the terms of the companies' contract.

When the contract expired in the beginning of the year, Walgreen said it was giving up about $5.3 billion in revenue per year. Even so, the company felt that this alternative was preferable to doing business with Express Scripts on improper terms.

After this, Express Scripts agreed to buy Medco Health Solutions, which was a competitor. Then, Express Scripts became the largest pharmacy benefits manager in the U.S.

Subsequent to battling through their legal dispute, the two companies have backed away from fighting. While the deal was amicable, a source indicates that this does not mean that the two companies will do business together in the future.

Business disputes are not always worth going to trial. However, before a company comes to any resolution, it is very important to evaluate all legal claims. Meeting with a legal representative can assist with such deliberations.

Source: Bloomberg Businessweek, "Express Scripts and Walgreen end lawsuits," June 1, 2012

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