BENTONVILLE, Ark. — It’s the kind of low-price power play that gives smaller-scale independent pharmacy owners — and chain drug store operators too, for that matter — the willies. In what promises to be another potent and potentially market-altering exercise in massive scale and competitive clout, Walmart has linked up with insurance heavyweight Humana to launch what it says will be the lowest-cost prescription drug plan for seniors who rely on Medicare Part D prescription drug coverage.
Both companies now are enrolling Medicare beneficiaries in the Humana Walmart-Preferred Rx Plan, which was announced Sept. 30. The plan will begin covering patients around the country as a government-approved Medicare prescription drug plan in January 2011, offering monthly premiums at the rock-bottom rate of $14.80.
That’s less than half the average national monthly premium set by prescription drug plans serving Part D, Walmart and Humana officials asserted, and is the lowest national plan premium in 2011 for a stand-alone Medicare Part D plan premium offered in all 50 states and Washington, D.C., according to the Centers for Medicare and Medicaid Services.
Compounding the low-price appeal: a promise from Walmart that plan members who have their scripts filled at a Walmart, Neighborhood Market or Sam’s Club pharmacy could see co-payments as low as $2 on some generic prescriptions.
Therein lies the rub for Walmart’s competitors, of course. The plan gives preferred status to Walmart’s own 4,000-plus pharmacies.
“This new co-branded prescription drug plan,” the two firms asserted in a joint statement, “can save a typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan an estimated average of more than $450 in 2011 on plan premiums and prescription medication co-payments and cost-shares, when compared with the average total costs for a Part D prescription drug plan in 2010.”
If successful, Humana Walmart-Preferred Rx will roil the Medicare market for medicines by blending the drawing power and geographic penetration of the nation’s fourth-largest pharmacy retailer with the massive enrollment muscle of one of America’s leading insurers.
Like Walmart’s much-copied $4 generic drug promotion did when it rampaged through the U.S. pharmacy market in late 2006 and early 2007, the new offering is generating plenty of attention from the press and from consumers. And John Agwunobi, president of Walmart’s health-and-wellness division, made no secret of the company’s long-term vision for its alliance with Humana. He acknowledged that the rollout of Humana Walmart-Preferred Rx “is intended to grow our business.”
The launch also extends an alliance between Walmart and Humana that dates back to the inception of Medicare Part D in early 2006, when the two firms partnered in an educational campaign for seniors. When the new drug coverage program got under way, informational kiosks staffed by Humana employees became a familiar sight at Walmart stores, alerting Medicare beneficiaries of their options under Part D and of the pharmacy services available through a co-branded Walmart-Humana prescription insurance card.
The new plan’s appeal to nervous seniors on fixed incomes is undeniably real — particularly in the wake of the nation’s most grueling economic tailspin in seven decades. And for Walmart — which proved adept at scrambling the prescription drug market when it launched $4 generics four years ago — the timing could hardly be better, as Americans continue to grapple with joblessness, steadily rising healthcare premiums and worries about the future.