Wal-Mart steps into pharmacy benefits arena

March 1, 2008

National Reports-Wal-Mart's recent announcement that it plans to enter the pharmacy benefits arena has perked up a few ears in the industry.

NATIONAL REPORTS-Wal-Mart's recent announcement that it plans to enter the pharmacy benefits arena has perked up a few ears in the industry.

In a speech to Wal-Mart employees at a meeting in Kansas City, Mo., Chief Executive Lee Scott made reference to a pilot program for a small number of employers to process their prescription claims.

Craig L. Kephart, a former vice president of specialty distribution services at Express Scripts Inc., believes that this move will create competition and lower costs for patients and employers.

That said, this move really doesn't address the fastest growing segment of the prescription drug market: high-cost specialty drugs, he says.

"These drugs will make up approximately 25% of all outpatient pharmacy expenditures in 2008, and require a much more service-intensive, ongoing patient interface in order to derive the maximum cost benefit," Kephart says. "It would be interesting to see if Wal-Mart could leverage their clinic strategy in conjunction with their pharmacies to address this gap. Both Wal-Mart and PBMs will need to create much better solutions for these drugs in order to continue to offer value to their clients."

Jennifer Luddy, a Medco spokeswoman, tells MHE through a company statement: "We respect Wal-Mart as a provider in our retail pharmacy network, but we are also comfortable with our leadership capabilities and our competitive positioning."

Meanwhile, the retailer also says that it plans to partner with local hospitals to open 400 care clinics by 2010 under the brand name "The Clinic at Wal-Mart."