Rx contracts between drug stores, big businesses is a win-win

WHAT IT MEANS AND WHY IT'S IMPORTANT There’s more than one way to help employers desperate to cut their health plan costs.

(THE NEWS: Walgreens pursuing Rx contract with Delta Air Lines, report says. For the full story, click here)

That’s the message inherent in Walgreens’ accelerating Pharmacy Management Excellence program. The service, which first gained widespread recognition last fall when Walgreens struck a far-reaching direct pharmacy service contract with heavy equipment maker Caterpillar, provides transparent prescription drug pricing and discounts to employers that offer prescription benefits to their employees, dependents and retirees.

As reported this week, Walgreens is pursuing a similar course with another major employer, Delta Air Lines, and is in talks with other companies, according to company spokesperson Tiffani Washington.

The direct approach highlights Walgreens’ emerging health care strategy: to align itself directly with payers as an agile, full-service solution and cost-saver. Pharmacy Management Excellence bypasses the traditional relationship between employer-sponsored health plans and the pharmacy benefit management companies that market themselves as a cost-effective link between plans and pharmacy providers.

Walgreens’ expanding outreach to employers — and its obvious determination to offer them an alternative to the traditional pharmacy provider contract between employer-based health plan sponsors and pharmacy benefit management companies — marks a clear point of competitive difference between the company and its top drug store rival, CVS Caremark. Walgreens’ leaders have concluded that the CVS Caremark model — which combines the scale of a massive, 7,000-plus drug store network with the market-moving power of a top-tier PBM — is not the only way to align community pharmacy with the goals of the managed care system. Nor is it the only way to serve the health plan payers who use that system to manage their employees’ health benefits and costs.

Whichever approach employers choose, the search for tools to bend the healthcare cost curve is becoming increasingly urgent, according to a new survey from CVS Caremark. This week, the company reported that more than 9-out-of-10 employers polled by the company said they would look for ways to cut their employees’ drug costs in 2010. Indeed, 2-out-of-3 companies told researchers that “reducing overall healthcare costs is their No. 1 success measure,” according to Jack Bruner, EVP strategic development for Caremark Pharmacy Services.

As reported by Drug Store News senior editor Antoinette Alexander March 11, the survey points up plenty of angst among health plan payers already reeling from the dismal economy and the increasing health-cost burden. “Employers tell us they are looking for more aggressive solutions to increase generic utilization and manage specialty pharmacy costs, while also focusing on programs to increase medication adherence and manage chronic diseases,” Bruner said.

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