Seeking More Equitable Contract, Kroger Health Sends Notice of Intent to Terminate to Express Scripts, Inc.

Express Scripts drug pricing model is unsustainable for Kroger and consumers; access to affordable prescriptions and wellness services remains company's top priority

CINCINNATI, Sept. 30, 2022 /PRNewswire/ -- Kroger Health, the healthcare division of The Kroger Co. (NYSE: KR), yesterday provided Express Scripts, Inc. (ESI), written notice of its intention to terminate their pharmacy provider agreement for commercial customers. Since February, Kroger has attempted on dozens of occasions to negotiate in good faith with ESI – seeking 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 is doing everything possible to deliver greater value for our customers and navigate this ongoing period of record inflation. We do not believe Kroger customers should have to pay higher costs to increase Express Scripts' profits," said Colleen Lindholz, president of Kroger Health.

"We took the necessary step of announcing our intention to terminate our contract with Express Scripts because the current arrangement does not enable Kroger to improve health access, deliver greater pricing transparency, and keep prices affordable for our more than 17 million patients. So far, our efforts to negotiate in good faith have not delivered an agreement in the best interest of our customers – especially members of the military and their families receiving benefits through Tricare – that protects them from rising costs amid record inflation. Kroger remains willing to negotiate any contract with Express Scripts that results in a fair, transparent agreement at a rate that benefits everyone – particularly our customers – and prevents any disruption of services."

Why is Kroger taking this step now?

• Kroger Health is proud to provide pharmacy services for our 17 million patients—enhancing their health, wellness, and nutrition.
• Any new agreement would need to increase access, deliver greater pricing transparency, keep prices affordable for our more than 17 million patients, and ensure Kroger is fairly compensated for the work done by our 22,000 health care professionals—from pharmacists and nurse practitioners to dietitians and technicians.
• However, ESI's current proposal is far out of line with comparable terms Kroger has with all other pharmacy providers, and far outside the industry standard.
• Kroger is committed to providing quality, affordable healthcare services to our customers around the country. This includes:
• Administering more than 11 million doses of the Covid-19 Vaccine.
• Offering more than 700,000 in-store anti-body tests.
• Providing more than 3 million at-home Covid-19 tests, with many of those at cost when a large number of Americans were out of work.
• $180,000 in free deliveries of prescriptions and rides for customers to receive vaccines.

What This Means for Kroger Health Customers:

• More than 90% of Kroger Health customers will be unaffected by the termination of the agreement.
• If a new agreement is not reached by December 31, 2022, most Express Scripts' commercial customers around the country will no longer be able to fill prescriptions at pharmacies within the Kroger Family of Companies.

About Kroger Health
Kroger Health, the healthcare division of The Kroger Co., is one of America's leading retail healthcare organizations, with over 2,200 pharmacies and 220 clinics in 35 states serving more than 14 million customers. Our team of 22,000 healthcare practitioners - from pharmacists and nurse practitioners, to dietitians and technicians – are committed to helping people live healthier lives. We believe in practicing at the top of our licenses and enabling "food as medicine" to help prevent or manage certain diseases. We are dedicated to providing testing and wellness services to help Americans combat the COVID-19 crisis. For more information, visit https://www.krogerhealth.com.

About Kroger

At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: To Feed the Human Spirit™. We are, across our family of companies nearly half a million associates who serve over 11 million customers daily through a seamless digital shopping experience and retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.

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SOURCE The Kroger Co.