UPDATED: Walmart Axes Half the Drug Brands Covered in Employee Health Benefit Plan

Last Updated Jul 20, 2009 2:40 PM EDT

Walmart today axed half the branded drugs it covers in an employee health benefit plan, according to a letter leaked to BNET.
  • UPDATE: Walmart confirmed the move. See the official statement below.
Previously, Walmart's health benefits covered about 260 brand name drugs -- from Abilify to Zyprexa -- according to a Walmart "Quick Reference Preferred Brand List" from January 2009. The July 20, 2009, list contains only about 128 preferred brands.

The move has huge consequences for workers' health -- Walmart is the U.S.'s largest employer with about 1.1 million employees (or "associates," as the company calls them). Roughly 700,000 associates are covered by the health plan, a Walmart spokesperson said.

The pharmaceutical industry will also cringe at the news, as Walmart's pharmacy benefit manager, WellPoint, will no longer pay for dozens of blockbuster or niche brands. Among those affected in the shuffle: Sanofi-Aventis' Ambien CR is axed but Sepracor's Lunesta stays on the list. Shire's Adderall XR loses its place but Bristol-Myers Squibb's Abilify stays on. The moves will likely push more Walmart workers to rely on the company's $4 generic drug program, in which anyone can pay cash at the retail giant's pharmacies for older drug equivalents that are off-patent.

A letter sent to Walmart employees states:
Effective July 20, 2009, the Preferred and Non-Preferred Brand Name Drug programs will be eliminated and will be replaced with a singe [sic] Brand Name Drug Plan. All of the drugs covered under the Non-Preferred Brand Name Drug Program will be eliminated (except Specialty Drugs).
Important changes to your Pharmacy benefits include: ... A single Brand Name Drug benefit with a cost to you of $30 or 20 percent, whichever is greater. (Any Brand prescription drug not on the Brand Name Drug List will not be covered.)
We are committed to helping you save money and live a better life.
A Walmart spokesperson told BNET that an associate could save $300 a year by switching from the $30 copay for a branded drug to Walmart's $4 generics. Walmart's Greg Rossiter tolf BNET:
We're in the midst of communicating this. It doesn't take effect until next month [because some employees did not yet get the letter]. We're pushing back the effective date to August 10.
Some Walmart employees are, unsurprisingly, unhappy. One told BNET:
There are no generics for drugs like Arthrotec that has protection for the stomach, and Ambien CR that is time released to help you sleep entirely through the night.

... Our insurance costs over $300 a month.
Walmart's official statement on the cuts, from Rossiter:
Walmart is well-known for providing associates with affordable prescription drugs, including more than 2,000 generic drugs available to associates at a cost of $4. Recently, Walmart began informing our associates that we will simplify the company's pharmacy benefits. Beginning August 10, the company will consolidate three drug benefits into two: a "Brand Name Drug benefit" and a generic drug program.

In many cases, our associates could see savings by converting a single prescription to a generic drug of $300 a year. Associates that choose to continue to take prescriptions that are not included in the Brand Name Drug or generic drug benefit will pay the regular retail price and receive the associate discount averaging about 20 percent. The current coverage program for specialty drugs, such as those that treat specific chronic or genetic conditions, isn't affected.

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