updated 2/11/2005 12:56:36 PM ET 2005-02-11T17:56:36

General Motors Corp. is dropping Walgreen Co. from its network of prescription drug providers, saying it feared the huge drugstore chain might sever ties with the world's biggest automaker over GM's policy of requiring mail-order purchases of some drugs.

But Walgreen said it had no plans to cut ties to GM and hoped to continue serving its employees.

GM has informed its 1.1 million employees, retirees and their spouses and dependents in the United States that effective March 1, they won't be able to fill prescriptions at Walgreen's 4,200-plus stores.

The automaker's prescription provider, New Jersey-based Medco Health Services, said in a letter to GM-covered enrollees that they could have prescriptions filled at chains such as those owned by CVS Corp. or Rite Aid Corp.

GM and Medco said they decided to cut ties with Walgreen out of concern it would stop doing business with GM, as it did last month with the state of Ohio. Walgreen, saying it disapproved of Ohio's mandatory mail-order program for some drugs, stopped accepting prescriptions from Ohio government employees on Jan. 1.

GM, Ford Motor Co., DaimlerChrysler AG and suppliers Visteon Corp. and Delphi Corp., last year adopted a mandatory mail-order program for maintenance drugs such as cholesterol-lowering drugs.

Walgreen spokesman Michael Polzin said the Deerfield, Ill.-based chain dislikes mandatory mail programs, but that it did not intend to cut ties with GM.

"I think it sounds like GM is getting bad information on this matter," he said. "We hope we can continue filling prescriptions with GM."

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