Are you a little bit worried, Express Scripts? Will you waive co-pays also?
From John Curry, May 4, 2009
"One big PBM, Express Scripts, told the WSJ that what Wal-Mart is really doing is trying to increase foot traffic in its stores."
So, a pretty good business decision isn't it, Express Scripts?
Wall Street Journal, May 4, 2009
Wal-Mart Tries to Step on Pharmacy-Benefit Managers’ Turf
Can Wal-Mart eliminate the drug-coverage middleman?
The retailer’s $4 generic-drug program has already prompted lots of pharmacies to follow suit. Those programs are especially attractive to the uninsured, who pay for their drugs themselves. Now Wal-Mart is testing a program with an employer that offers insurance to its workers, heavy-equipment maker Caterpillar.
Here’s how the WSJ describes the program: Wal-Mart gets a fixed markup over its cost for the drugs it sells to Caterpillar employees. Though Wal-Mart doesn’t reveal the costs to Caterpillar, they are verified by a third party. The markup guarantees a profit for Wal-Mart, while reducing the cost to Caterpillar. The employer has waived co-pays on generic prescriptions bought from Wal-Mart.
This sort of thing sounds simpler than many of the arrangements that employers make with PBMs, in which the PBMs pay pharmacies one amount for drugs and turn around and charge the employer a different, higher amount, often without telling it what the pharmacy got paid. Those types of opaque arrangements have sometimes resulted in huge mark-ups. Wal-Mart is essentially eliminating the middleman and negotiating the prices of its drugs with employers directly.
One big PBM, Express Scripts, told the WSJ that what Wal-Mart is really doing is trying to increase foot traffic in its stores. And some analysts question whether this type of program will gain much traction.
Deutsche Bank analyst Ross Muken, for instance, in a note to investors pointed to PBMs’ benefit-management programs that encourage patients to switch from branded drugs to cheaper generics. The firm sites PBMs’ aggressive efforts to get patients to switch from Pfizer’s branded cholesterol-lowering drug Lipitor to the generic version of Merck’s Zocor back in 2006, including significant publicity efforts with both patients and prescribers.
“CAT’s strategy assumes that it can promote brand to generic switching, similar to what a traditional PBM does,” Muken writes. “We believe that this assumption is at fault for two reasons.” Getting patients to change their behavior takes “a significant amount of time and expertise to interact with doctors, encouraging them to prescribe generic drugs,” he says. Plus, many PBMs have mail-order programs that are especially useful for encouraging switching.
posted by Kathie Bracy at 4:27 PM
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