Wal-Mart Stores, Inc. (NYSE:WMT) Wants To Be Main Medicaid Provider
The retail giant, Wal-Mart Stores, Inc. (NYSE:WMT) shown its desire to be the main provider of drugs for Medicaid as its representative proposed to a Alabama state Medicaid reform panel on the company’s interest.
The members on the panel heard the Wal-Mart’s proposal on Thursday, October 24, 2013, as reported by the Anniston Star. The panel was appointed by the state Governor Robert Bentley to find out the cost effective opportunities to dispense drugs through Medicaid – the state and federal medical insurance program.
Kevin McCarter who was representing Wal-Mart, proposed to make Wal-Mart the main dispenser of Medicaid drugs. He said that around 78% of Alabama’s Medicaid patients live within 10 miles of the Wal-Mart store and hence company propose to make its retail as well as affiliate stores, sole provider of Medicaid prescriptions in areas where stores are in near vicinity and the coverage gaps could be filled by the community pharmacies.
The state has budgeted around $615 million this year for the Medicaid, which represents the single biggest item in the General Fund budget. One of the Panelists, Jim McClendon said that the panel members are considering both the cost savings as well as impact on the community.
One proposal could be turning the state’s Medicaid to a PBM or Pharmacy Benefit Manager that could manage drug benefits while saving the money. Even this kind of system was also proposed during Thursday by representative from three major PBMs: CVS Caremark Corporation (NYSE:CVS), Express Scripts Holding Company (NASDAQ:ESRX) and MedImpact Healthcare.
The President at MedImpact, Greg Watanabe commented that the PBMs could help save the state $30 million to $50 million by managing the use of prescription drugs by patients and at the same time offering better rates on the drugs they buy.
However, McCarter’s proposal projected the state saving over $120 million in the first year if Medicaid is switched to Wal-Mart with saving growing to over $200 million per annum in the eight year.