Walgreen Co. has reached an agreement with Express Scripts Inc. to remain a network pharmacy provider for Blue Cross and Blue Shield of Kansas City.

In addition, Walgreens said that it has made an offer to Express Scripts to continue serving the Department of Defense's Tricare pharmacy program next year. The program covers 6 million beneficiaries.

DEERFIELD, Ill. — Walgreen Co. will remain in the Express Scripts Inc. pharmacy network for Blue Cross and Blue Shield of Kansas City and has made an offer to the pharmacy benefit manager to continue serving the Department of Defense’s Tricare pharmacy program in 2012.

In a one-sentence statement on Friday, Blue Cross and Blue Shield of Kansas City said, "Walgreens has entered into an agreement with Express Scripts for Walgreens to continue to be a participating provider in Blue Cross and Blue Shield of Kansas City’s prescription drug program as of Jan. 1, 2012."

Express Scripts typically decides which pharmacies are in a health plan client’s provider network, but a small number of its clients — including Blue Cross and Blue Shield of Kansas City — are permitted to choose for themselves, an Express Scripts spokesman told The Wall Street Journal on Friday.

Earlier this month, Walgreens and Express Scripts also agreed to allow members of two health benefit plans in Puerto Rico — MMM Healthcare Inc. and PMC Medicare Choice Inc. — to maintain access to Walgreens pharmacies at the start of 2012.

Walgreens announced in late June that it will leave Express Scripts’ retail pharmacy network after Dec. 31 because of a contract impasse with the PBM. The drug chain and PBM remain at a standoff, and Walgreens has since begun efforts to move forward without participating in the Express Scripts network.

On Monday, Walgreens said the terms it proposed to Express Scripts for Tricare, the U.S. military’s health benefits plan, would yield savings for the program without disrupting beneficiaries’ choice of a network pharmacy provider. The drug chain reported that it also reiterated its earlier, rejected offer to contract separately with Express Scripts for Tricare from other Express Scripts commercial business to avoid any disruption to military families and retirees.

Published reports on Monday afternoon, however, indicated that Express Scripts was unmoved by Walgreens’ latest offer.

According to Walgreens, Express Scripts has ignored or rejected all prior offers made by the chain and has declined to negotiate a separate contract for Tricare and its 6 million beneficiaries. Walgreens said that in its latest proposal to for Tricare, it’s offering Express Scripts "an ironclad guarantee" that the chain’s prices would match or beat the average costs per adjusted prescription of all other pharmacies in the Tricare network.

"Those costs would be compared on an apples-to-apples basis and verified by an objective third party each quarter," Walgreens stated, adding that it also has committed to reimbursing Tricare for any overage after the end of each quarterly review.

In addition, Walgreens said that under its latest proposal, if it reaches an agreement with Express Scripts that included lower rates than those proposed for Tricare, then Tricare would be able to switch to those rates.

The drug store chain noted that in recent weeks it has heard from nearly 200,000 military beneficiaries who expressed concern about not having access to Walgreens retail pharmacies as part of the Express Scripts provider network.

*Editor’s Note: Article updated with information on reaction by Express Scripts.