Wal-Mart Helps To Save Employers on Drug Costs

Pharmacy benefit managers could soon find themselves contending with Wal-Mart to broker prescription drug prices. The Arkansas-based retailer is already looking to expand a two-month-old pilot with Caterpillar to negotiate drug prices for its 70,000 U.S. employees, retirees, and their spouses and children. "We are already in discussions with other companies to implement a direct-to-employer initiative," said a Wal-Mart spokeswoman.

It's an innovative application of the retailer's core competency of cutting costs in the supply chain while simultaneously expanding its low-cost prescription drug program. Wal-Mart's legendary penny-pinching made the retailer an attractive candidate when Caterpillar went looking to weed out inefficiencies in its health care plan, said Caterpillar's pharmacy manager.

Wal-Mart's pricing model saves Caterpillar enough money that it is able to waive the otherwise $5 co-pay for about 2,500 generics for employees who fill at Wal-Mart.

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Another example of Wal-Mart's strong leadership in competitive, market-based solutions to health care, like its $4 prescriptions and retail health care clinics.