Wal-Mart CEO Announces Pilot Program To Provide Prescription Drug Services For Some Employers

Main Category: Health Insurance / Medical Insurance
Also Included In: Pharmacy / Pharmacist
Article Date: 25 Jan 2008 - 8:00 PDT

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Wal-Mart Stores CEO Lee Scott on Wednesday at an annual meeting in Kansas City, Mo., announced plans to begin a pilot program under which the company will help certain employers "manage how they process and pay prescription claims," an indication that Wal-Mart seeks to enter the pharmacy benefit manager business, the Wall Street Journal reports.

Scott did not name the employers or discuss the details of the program, but he said that Wal-Mart could save the companies more than $100 million this year. According to a Wal-Mart spokesperson, the employers might contract with the company to fill all or a majority of prescriptions for employees. Wal-Mart could reduce health care costs for the employers through a program that offers prescriptions of generic medications for $4 (Zimmerman/Martinez, Wall Street Journal, 1/24).

Scott also said that Wal-Mart plans to work with health care providers to increase the use of electronic prescriptions and establish electronic health records for U.S. employees (Mui, Washington Post, 1/24).

David Veal, a PBM analyst at Morgan Stanley, said, "Our conversations with employee benefit managers suggest they're open to alternative approaches, so there's room in the marketplace for a different type of offering." He added, "As the U.S. economy gets tougher, employers are going to look for new ways to control costs, and Wal-Mart will find a receptive audience." However, Veal said that Wal-Mart would face some challenges in the PBM business because "employers are risk-averse" and "hesitant to move just on price" (Wall Street Journal, 1/24).

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