Can Wal-Mart eliminate the drug-coverage middleman?

Here’s how the WSJ describes the program: Wal-Mart gets a fixed markup over its cost for the drugs it sells to Caterpillar employees. Though Wal-Mart doesn’t reveal the costs to Caterpillar, they are verified by a third party. The markup guarantees a profit for Wal-Mart, while reducing the cost to Caterpillar. The employer has waived co-pays on generic prescriptions bought from Wal-Mart.

This sort of thing sounds simpler than many of the arrangements that employers make with PBMs, in which the PBMs pay pharmacies one amount for drugs and turn around and charge the employer a different, higher amount, often without telling it what the pharmacy got paid. Those types of opaque arrangements have sometimes resulted in huge mark-ups. Wal-Mart is essentially eliminating the middleman and negotiating the prices of its drugs with employers directly.

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