Walgreens prepping cost-savings solution for total health care (not just scripts)
WHAT IT MEANS AND WHY IT'S IMPORTANT — Walgreens is helping to redefine what it means to be a successful retail pharmacy operator. The proof is in this new direction that Walgreens is taking — approaching employers and payers with a comprehensive, cost-lowering strategy across that company's entire health spend, not just their prescription spend. But the proof of the pudding is in the eating, and that's why joining a veteran like Robyn Peters with Jeff Berkowitz, both of whom have operated extensively in the managed care space, will help Walgreens make what may be considered an unconventional pitch directly to employers and payers.
(THE NEWS: Walgreens setting stage for PBM selling season with 25-year vet at the helm. For the full story, click here.)
The other piece of news that will help bolster Walgreens' cost-reduction pitch against the entire healthcare spend is its proposed acquisition of BioScrip's community specialty pharmacies and centralized specialty and mail-service pharmacy businesses, which will help Walgreens reach an additional 500,000 patients with chronic and complex health conditions.
"As our healthcare strategy has been evolving ... and the healthcare landscape has gotten more complex, we have been thinking long and hard about fully integrating our approach to the payer community, whether that be employers large and small, PBMs — large, medium and small — the health plans segment, the government segment, the health systems segment," Jeff Berkowitz, Walgreens SVP pharmaceutical development and market access, told Drug Store News. "What this integrated model allows us to do is go to the payer community and not just focus on the 10% or 8% that is the drug spend, but really partner with and focus with them on their entire medical spend and how to lower that," Berkowitz said. "That's the real opportunity here."
But Walgreens does have a tough row to hoe with respect to not being in the Express Scripts pharmacy network. Walgreens' January comparable-pharmacy sales were impacted by 10.6% because of the Express Scripts situation — that affirmed for at least one analyst that Walgreens will only retain 15% of the Express Scripts business by year end. And though Walgreens is working hard to retain much more than that — Walgreens noted that a hard marketing push against its Prescription Savings Card since January has netted a record 700,000 new signees — the pharmacy chain adjusted its annual prescriptions-filled projections for fiscal 2012 to be around the low end of its previously announced range of 97% to 99% of prescriptions filled versus fiscal 2011.