As of Friday, Blue Cross and Blue Shield subscribers will have limited pharmacy choices, after a last-minute attempt by the VIX Pharmacy chain to block the network failed today in U.S. District Court.
"There is no evidence before me that plaintiffs established the network with malicious intent or for the sole purpose of reducing Vix Pharmcay sales," Federal Judge John T. Curtin said in denying a request for an injunction by the parent company of the Vix chain.
Curtin said Blue Cross and Blue Shield established the network to hold down its overall pharmacy costs.
Attorneys for Vix had argued that damage caused by the limited network would be "immediate, obvious and economically ruin us."
The Vix chain had filled 85,000 prescriptions for 20,000 Blue Cross subscribers in the first six months of this year.
But beginning Friday, Blue Cross and Blue Shield of Western New York's 570,000 area subscribers will be limited to Rite Aid, Tops, Wegmans, Wal-Mart, Kmart, select Quality Markets and all independent pharmacies for their prescriptions.
The network includes 234 of the 350 drugstores in the eight-county area of Western New York, but excludes the Vix, Eckerd, Walgreens and CVS chains.
About 171,000 of the 570,000 Blue Cross members have active prescriptions. The company estimates that about 45 percent -- 77,000 people -- were using an out-of-network pharmacy. As of this week, about half those subscribers still had not picked a new drugstore.
As of Friday, if they have a prescription filled at one of the outside pharmacies, they will have to pay cash.
Drug Emporium, the Ohio-based chain that bought 12 area Vix stores from Tops Friendly Markets for $31.5 million earlier this year, has filed three claims in federal court over the new pharmacy network.
The case it lost today charged illegal interference of business relationships under state law.
The insurance company's program managers predicts a large number of procrastinating members will select new pharmacies next month when prescription bottles run dry.
"We do expect it to be a high volume month for transitions. We encourage people to contact their new pharmacy early, probably a week ahead of time at least," said Renee Fleming, director of pharmacy for Blue Cross and Blue Shield of Western New York.
Advance notice will give pharmacists a chance to contact the patient's physician for any necessary medical information, she said.
The insurance company hopes to improve control of its pharmacy benefit program and health care by requiring participating pharmacists to provide additional services.
The company designated Rite Aid as its lead pharmacy and provided the chain with subscriber names and addresses. The sharing of customer information further angered some Blue Cross subscribers who feel their privacy had been invaded.
Rite Aid has come under fire this year on allegations of consumer abuses.
In July, it agreed to pay $1.4 million to settle charges it sold expired infant formula, contraceptives and other products in California stores.
The Florida attorney general's office filed a federal racketeering lawsuit against the Camp Hill, Pa.-based chain earlier this month alleging systematic overcharging of about 29,000 uninsured customers. Rite Aid denied the allegations and said it plans a vigorous defense.
Rite Aid's stock has plunged more than 70 percent since March because of its problems.
Some local pharmacists think Blue Cross and Blue Shield of Western New York looks bad by associating with Rite Aid.
"Blue Cross has a little egg on their face, and you would think they would take a closer look at this," said John Santarsiero, owner of the Kenmore Prescription Center.
The local insurance company said it stands behind Rite Aid.
"We're very confident in them as a partner," said David Ignacio, vice president for corporate marketing at Blue Cross and Blue Shield of Western New York. "There have been these allegations made, and they're dealing with the allegations. We're confident those cases will turn out well."