Wal-Mart in talks with several companies to expand prescription drug discount program for employees

Wal-Mart on Friday announced that it is in negotiations to expand to several other companies a generic drug purchasing pilot program it currently runs with Caterpillar, the Chicago Tribune reports.

Under the pilot program, Wal-Mart waives the $5 copayment for generic drugs for Caterpillar employees when they purchase their medication at Wal-Mart or Sam's Club pharmacies. According to the Tribune, the incentive to fill prescriptions at Wal-Mart or Sam's Club pharmacies boosts Wal-Mart's pharmacy business and pushes more potential customers into their retail stores, where they might purchase other items.

According to the Tribune, the "most radical aspect of the test ... is the threat of unraveling how the health care industry buys and sells prescription drugs." As part of the program, Caterpillar has a contract to purchase drugs for employees directly from Wal-Mart, bypassing the need for a pharmacy benefits manager. The price Wal-Mart charges Caterpillar is based on what Wal-Mart paid the drugmaker. Those prices are not revealed to Caterpillar but are monitored for inflation by an independent auditor.

Todd Bisping, pharmacy benefits and informatics manager at Caterpillar, said, "I have talked to multiple large companies who called me because they are interested in learning more about this concept."

Meanwhile, Walgreen has said it is seeking to offer a similar program, the Tribune reports. Michael Polzin, a Walgreen spokesperson, said, "We're going down a similar path by going directly to employers, but we have a more comprehensive offering," which includes reduced drug prices; health and wellness clinics; and retail clinics on corporate campuses (Jones, Chicago Tribune, 3/28).