Illinois | Fall | 2009 | Health Plan Analysis

A new agreement between Caterpillar and Walgreens could point the way to a change in drug dispensing for large employers. Under this agreement, Caterpillar contracts directly with Walgreens, where 100,000 employees, dependents and retirees can pick up their drugs. The difference is that the price to Caterpillar will be based off the Walgreens Propriety Price List, which is based off the cost Walgreens pays the drug manufacturer. That means that Caterpillar will have the actual drug cost from the manufacturer, eliminating the role of PBM, which profits from and hides details of the spread between payment to the manufacturer and cost to the client. The move – which is also underway at Wal-Mart – will likely be repeated for other large employers seeking transparency and savings. Elsewhere, Health Alliance has updated its value-based benefit design by reducing copays on its asthma control medication. Drug spending and adherence are up and the Urbana-based health plan is just now getting data that could show reduced medical costs.