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NEWS
INDUSTRY NEWS
02/21/05
"General Motors, Walgreen Disagree Over Role of
Mail-Order Pharmacies in Health Plans"
Article from Kaiser Network Online
General Motors' recent decision to eliminate Walgreen from its pharmacy network for employees has prompted a "showdown" over how employees purchase prescription drugs, the Wall Street Journal reports. In an effort to save money, GM and other large employers in recent years have begun requiring workers to order medications for chronic diseases from mail-order pharmacies, while allowing members to purchase short-term medications from traditional pharmacies. According to Medco Health Solutions, GM's pharmacy benefit manager and mail-order pharmacy, mail orders are less expensive because there is less labor, and overhead and prescriptions are filled in bulk. Walgreen in December told some employers with mandatory mail-order policies, including GM, that its drug stores would no longer fill short-term prescriptions for employees if the policy continued. GM then barred Walgreen from covering 75% of its 1.1 million workers. Although the companies are in discussions regarding a continued relationship, Gregory Wasson, a Walgreen senior vice president, said, "We're not going to stand back and watch our most loyal customers ... be forced to another channel when there's a solution." Walgreen in 2004 began offering 90-day supplies of drugs -- the typical amount for mail order -- to some customers in stores and through its own mail-order program. Walgreen and other pharmacies also hope customers "will pressure their employers to change policies," the Journal reports. A recent Hewitt Associates survey found that 22% of employers will have mandatory drugs-by-mail programs in 2005 (Adamy et al., Wall Street Journal, 2/14).
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