CHICAGO: Drugstore chain Walgreens is turning what first appeared a
PR gaffe into a PR windfall as it lobbies the state of Illinois to
abandon recent Medicaid prescription-reimbursement rate cuts.
On March 29, Walgreens announced that it would reduce pharmacy hours in
30 Illinois stores because recent cuts in state
prescription-reimbursement rates for Medicaid recipients made those
stores unprofitable. Eighteen of the stores are in Chicago, mostly in
poor black and Hispanic neighborhoods on the south and west sides.
Walgreens' decision sparked a wave of protests from community groups and
prompted the Rev. Jesse Jackson to urge the company to reconsider.
However, Walgreens appeared less than surprised at the negative
'We anticipated a mixed reaction,' said Michael Polzin, the company's
manager of media relations.
Company CEO L. Daniel Jorndt quickly accepted an invitation to meet with
Jackson and others. Shortly after that meeting on March 31, he told a
South Side Baptist church congregation that Walgreens would postpone the
pharmacy closings for 30 days while it tried to get the state to raise
reimbursement levels. His speech was shown on all the local nightly news
The company had been haggling with the state since November. 'After
seeing months of no progress, we felt we had to take some action,' said
Raising community concerns about the new state policy 'was our intention
all along,' he said.
According to Chicago PR people, Walgreens is likely to see little
long-term loss of business as a result of the incident. 'It can be
quickly forgotten because they acted quickly,' said one Chicago PR
Referring to Walgreens' success in inspiring Chicago community groups to
pressure the state to act, Gene Reineke, who runs Hill & Knowlton's
Chicago office, said: 'They may have brought the issue to a head. In the
long-term, it may work out in Walgreens' favor.'
Added Polzin, 'I don't think we have to recover from anything.'
Company officials will be meeting with community groups this month to
garner additional support. Walgreens is working with Chicago-based
Danielle Ashley Advertising and Public Relations on the issue. It does
not have an agency of record.