Walgreens out of running for massive Chicago contract

March 20, 2010 9:07:08 PM PDT
A Walgreens employee stole sensitive bidding materials from a rival company, forcing the Deerfield, Ill.-based drug store to take itself out of the running for a contract worth hundreds of millions of dollars. It was a contract to provide pharmacy benefits to thousands of city and county employees.

Saturday, ABC7 has a preview of an exclusive story being broken by the New York Times and the Chicago News Cooperative.

Walgreens is out, removing itself from the competition, while fierce rival, CVS-Caremark, is still in, hoping to keep the contract it currently has to provide pharmacy benefits for tens of thousands of city and county employees.

The multi-million-dollar contract is up for bids.

In January, a Walgreens employee walked away with what is being described as 'proprietary information' left behind by someone with CVS-Caremark.

"The material had been left in a meeting room where the various bidders took turns getting together and making their presentations to the evaluations committee. The Walgreens official found the material there and walked away with it," said Dan Mihalopoloous, city hall bureau Chief for the Chicago News Cooperative.

Mihalopoloous is writing the story that was set to appear in Sunday's New York Times. He says he got a tip from someone inside city hall that Walgreens was quietly investigating the theft.

Walgreens hired former U.S. Attorney Patrick Collins to conduct an internal investigation.

In a statement, Walgreens spokesperson Michael Polzin said, "We voluntarily withdrew our bid and notified the responsible city officials regarding the circumstances for our withdrawal."

Walgreens said the employee who took the information is no longer with the company but would not say whether that person resigned or was fired. It was also unclear whether there may be criminal charges to come.

The City of Chicago, the CTA, CPS, Cook County and many other public agencies are all covered by the contract.

CVS-Caremark has held the contract since 2004, and the City of Chicago alone has paid that company nearly $500 million in that time.

"The contract is worth another $50 million a year, rougly, from Chicago Public School, 30 to 35 [million] from Chicago Transit Authority, and you throw in City Colleges of Chicago, as well as the Chicago Park District and Cook County, and you can see that this is a massive deal for whoever wins the contract," said Mihalopoloous.

A massive deal that is now down to four players. Walgreens, one of the largest companies in the state and the largest drug store in America, says it did the right thing.

But it has to hurt.