Wal-Mart Stores CEO and President Lee Scott says the company's decision to contract with select employers on prescription claims management will save some of the employers more than $100 million in 2008.
The company announced last week that the retail giant is branching into pharmacy benefits management and electronic health records.
Scott said Wal-Mart will contract with "select employers in the U.S. to help them manage how they process and pay prescription claims." Serving in this pharmacy benefits manager role, "we believe we can save employers more than $100 million this year alone."
That suggests a fairly aggressive rollout into the pharmacy benefits manager line, which has been dominated by a few large players. Employers and insurers contact with benefit managers to provide prescription drug coverage to workers; PBMs negotiate lower prices from pharmacies and sometimes operate their own drug distribution businesses.
Wal-Mart already ranks as the third largest pharmacy in the United States, trailing Walgreens and CVS. Last year, it announced plans to become a player in the retail clinic space by opening several hundred clinics in its stores over the next several months.
Wal-Mart's announcement was met with concern by the National Community Pharmacists Association, which worried that Wal-Mart might use its PBM role to direct patients to its own pharmacies.
"The PBM industry badly needs to be reformed. The current PBM business model is one that lacks transparency and has come under fire in multiple legal proceedings," said Bruce Roberts, executive vice president and CEO of the NCPA. "Wal-Mart has the opportunity to provide a positive influence on the PBM marketplace. Its pockets are deep, and its sheer size causes industries to take notice."
"Wal-Mart's track record in healthcare is not strong," he added. "It has commoditized prescription medications by selling them below its cost, and it has engaged in predatory pricing that has hurt small business healthcare providers."
In his speech before 7,000 company store managers in Kansas City, Mo., Scott also said Wal-Mart wants to play a larger role in facilitating the use of electronic prescribing.
"We also believe we can help with how prescriptions are filled," Scott said. We will partner with doctors and other providers to increase the number of electronic prescriptions we fill in the U.S. to 8 million by the end of the year. This will be a nearly 400 percent increase in e-prescriptions at Wal-Mart."
Scott noted that the company's flexible health benefits plan, announced last year, has had a big impact. Some 93 percent of the company's workers now have health coverage, up three percentage points from the previous year.
"Another area in healthcare where we will apply our technological know-how is health records," he told the store managers. "Wal-Mart will provide electronic health records to U.S. associates and their family members - including retirees and including all of you (managers) - by the end of 2010. These records will be personal, private and portable. They will drive down costs and improve quality and safety."