DEERFIELD, Ill. — Walgreen Co. said it will keep filling Medicaid prescriptions at its Washington state pharmacies through March 15.

The drug store chain, which operates 121 pharmacies in Washington, said late Friday its decision to delay the withdrawal from the program comes as constructive talks continue between the state and the company.

"We’re encouraged by the state’s willingness to continue working with us to find a solution that will allow all of our stores to continue serving our Medicaid patients," Kermit Crawford, Walgreens’ senior vice president of pharmacy, said in a statement. "We recognize the budget challenges the administration and the [state] legislature face, and we’re optimistic that our continued talks will result in a solution that will provide the savings the state is looking for, while allowing pharmacies to maintain service for those patients with the most need and the fewest options."

Walgreens had announced on Jan. 13 that it would stop filling Medicaid prescriptions in 64 of its Washington stores because of a reduction in reimbursement to pharmacies under the Washington’s Medicaid program.

"I appreciate Walgreens’ decision to delay any withdrawal from Medicaid, and the thoughtful ideas they’ve brought to us for reducing overall pharmacy costs," stated Susan Dreyfus, secretary of the Washington State Department of Social and Health Services. "I am committed to working constructively with them, the entire pharmacy community and the legislature on further strategies that will allow us to meet the needs of our Medicaid enrollees within a very difficult budget environment."

A week before Walgreens announced its move to exit Washington’s Medicaid program due to pharmacy reimbursement reductions, Bartell Drugs said it planned to discontinue Medicaid prescriptions at 15 of its 57 stores starting February 1.