Managed Care - April 2008 - (Page 36) Could a Wal-Mart PBM Succeed? The company can be expected to be as tough in the PBM arena as in retail, but it has a few hurdles to overcome By John Carroll Contributing Editor to have a new entity in the marketplace,” says David Dross, Mercer’s national leader of the managed pharmacy business. “It makes everyone else sit up and take notice, particularly if it’s someone as large as Wal-Mart. They pay attention. And I can tell you, we’re getting many questions from employers.” W AP PHOTO/BETH HALL Mum’s the word Aside from a brief glimpse at its intentions, WalMart has largely been proceeding under a cloak of silence, declining to spell out exactly what its strategy will be. But Dross, who’s been talking with WalMart officials in Bentonville, Ark., and other observers have been quick to flesh out the company’s likely strategy. Beginning as a partner with WellPoint Next Rx, with the health plan’s PBM handling back office work, the national retailer will woo likely employers — and the array of health plans that manage their populations — where WalMart leaves its biggest marketing footprint: around the edges of cities and in rural areas. If Wal-Mart stays in the game, it could change the way the entire PBM business is operated. Facing the Shoppers walk past a sign that lists the cost of medical treatments at a RediClinic in a persistent criticism that Wal-Mart in Rogers, Ark. The retailer shows growing interest in health care services. PBMs’ opaque drug pricing strategies leave most employers clueless about the actual wholesale intention to put one giant-size toe in the waters of prices that benefit managers are paying or the rethe pharmaceutical benefit management business, bates that are earned for managing market share, the message swiftly rippled among the nation’s emWal-Mart has the power to shine a klieg light on the ployers. A new player was coming into the business numbers. A buyout of even a small PBM would prowith the kind of clout that could change the rules vide the kind of corporate infrastructure needed to of the PBM game. manage a wider operation. And in one area in par“I do think it is interesting from my perspective hen Wal-Mart tackles a new market, it has enough brawn to bend prices for every player in the game. The retail leviathan’s low-price generic drug program — announced less than two years ago — has been credited with shaving a billion dollars off of America’s drug bill. Smaller competitors have often been forced to shutter their stores, complaining that Wal-Mart’s retail price was less than their wholesale cost. So when the world’s largest retailer signaled its 36 MANAGED CARE / APRIL 2008
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