CVS's Pain May Be Rivals Gain (ESRX, MHS)

With Walgreen's (NYSE: WAG) refusing to participate in future CVS Caremark's (NYSE: CVS) pharmacy network plans, rival PBM's are seeing interest today.

Express Scripts (Nasdaq: ESRX) is up 3.8% today and MedcoHealth Solutions Inc. (NYSE: MHS) is up 4.7%.

Walgreen said Monday that they will not participate in future pharmacy benefits network plans of rival CVS Caremark due to issues that include network and reimbursement problems.

Analyst at Deutsche Bank said, "as investors in retail stocks are looking for safety and limited downside risk, this adds a significant element of risk, and healthcare investors in CVS may just turn to competing PBMs."

The firm still is positive on CVS though, saying at $31/share investors' reaction to CVS has been overdone and at 11.5x 2010 P/E appears to be a very attractive entry point.

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