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Local pharmacies leery of Caterpillar Rx policy

July 09, 2010 By: Nadia Category: Free Prescriptions, HealthCare, Medtipster, Prescription News

www.Medtipster.com Source: Winston-Salem Journal, 7.9.2010

A group of independent local pharmacies supports Caterpillar Inc. opening a plant in Winston-Salem, but not if it costs them customers.

That’s why they are appealing to city and county officials to make equal prescription-drug access to potential Caterpillar employees a part of any incentive package with the company.

The pharmacies are concerned about a preferred prescription-drug agreement that Caterpillar has with Walgreens and Wal-Mart.

The agreement, which runs through 2011, provides for lower or no co-pays for Caterpillar employees who fill their prescriptions with Walgreens and Wal-Mart. Employees pay more if they fill their prescriptions through an online or mail-order pharmacy, other chains or independent pharmacies.

“With Caterpillar’s policy, if one of our customers gets hired by Caterpillar, we could lose them,” said Dave Marley, the president and chief executive of Marley Drug in Winston-Salem.

“This, combined with the fact that our own tax dollars were used to entice Caterpillar, and it becomes wholly unacceptable.”

Caterpillar has named Winston-Salem as one of three finalists, along with Montgomery, Ala., and Spartanburg, S.C., for a proposed $426 million manufacturing plant with 510 company and contract employees.

Last week, Winston-Salem and Forsyth County offered Caterpillar a combined $23.4 million in incentives. Caterpillar plans to make a decision in August.

Marley said that the pharmacies are “willing to accept the exact same reimbursement terms given by Walgreens and Wal-Mart.”

“We feel there is no way this would be negotiated after the fact, so if there is going to be a change in Caterpillar’s policy, it has to be raised now and discussed now,” Marley said.

Also making the request are Andrews Pharmacy, East Winston Pharmacy, Gateway Pharmacy, Jonestown Pharmacy, Lewisville Drug, Medicap Pharmacy on Liberty Street and Medicap Pharmacy on Reynolda Road.

Mayor Allen Joines said the city “will bring this concern to the company’s attention if we are lucky enough to be negotiating a contract.”

At cathealthbenefits.cat.com, Caterpillar said the “direct contracts with Wal-Mart and Walgreens use a transparent cost-plus pricing methodology that is intended to eliminate unnecessary and hidden costs in the prescription-drug supply chain.”

Caterpillar did amend its policy to allow independent pharmacies to participate at the Walgreens and Wal-Mart tier in rural areas that don’t have easy access to those stores.

A small percentage of employers have adopted similar policies regarding prescription drugs, said Steve Graybill, a senior consultant for Mercer, a human-resources consulting company.

David Howard, a spokesman for R.J. Reynolds Tobacco Co., said that in 2009, the manufacturer opened up its health-care plan to give employees access to more than 59,000 pharmacies, including national chains and many local pharmacies. Before that, Reynolds provided most medical care for its employees through company-sponsored clinics such as Winston-Salem Health Care.

The bulk of local Reynolds employees have still chosen to use Winston-Salem Health Care and its pharmacy for years, Howard said. “Employees have the option to go outside of network for health care and prescriptions, but they will have higher out-of-pocket costs,” Howard said.

Media General Inc., the parent company of the Winston-Salem Journal, has a contract with Medco, a mail-order pharmacy that provides discounts for employees, but employees can fill prescriptions elsewhere, as well.

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