Walmart Raises Wages for Some Pharmacists and Opticians

Walmart, the nation’s largest private employer, said on Wednesday that it was increasing the wages for 7,700 of its pharmacists and opticians, as it expands its health business and seeks to retain the workers in a competitive environment.

The retailer said the raise would push the average annual salary of the more than 3,700 pharmacists affected to more than $140,000. Walmart declined to share the current salary rate, saying it was based on location and role.

It said the opticians could now “expect” to make an average hourly wage of more than $22.50. According to the Bureau of Labor Statistics, the mean annual wage for a pharmacist in the United States is $129,410 and the mean hourly wage for opticians is $21.58.

Walmart employs 16,000 pharmacists and 12,000 opticians overall.

The company also said it was starting a program in which associates who worked in its Vision Center could receive certification and licensing as a way to move into higher-paying positions.

“We’ve listened to our associates and taken their feedback about how their work environment needs to improve,” Brian Setzer, Walmart’s executive vice president of health and wellness, said on Wednesday at the retailer’s annual shareholder meeting.

Why It Matters: Pay matters in a competitive labor market.
This year, Walmart raised wages for workers across its business as a way to compete for talent. Inflation is affecting not only its shoppers, but also its employees. And the job market continues to be robust, giving workers more options. In January, Walmart reduced its pharmacy hours as it grappled with a tight labor market.

That same month, the company said it was increasing its minimum wage for store workers to a range of $14 to $19 an hour, up from $12 to $18. Its average wage is still not as high as some competitors, like Costco.

Last year, it also raised wages for pharmacy technicians working for Walmart and Sam’s Club to an average of over $20 an hour and promised more frequent raises.

For years, Walmart faced pressure from unions, policymakers and activists to increase its pay for workers in its stores. Because of its scale, Walmart’s recent move to boost pay could signal to the rest of the retail industry that companies still need to provide more incentives for workers to stay competitive in the labor market.

Background: Walmart sees its health business as a way to drive growth.
Walmart opened its first health center in 2019. By providing health care services, the retailer is seeking to gain a deeper foothold in the communities where it operates and grab a bigger share of the billions of dollars Americans spend on medical care each year.

It currently has 32 health centers in the United States, with plans to have more than 75 by the end of next year.

“Strong growth” in its health and wellness category helped drive an increase in the company’s comparable sales for its most recent quarter, John David Rainey, Walmart’s chief financial officer, said this month.

At the same time, there is a shortage of pharmacists across the country. After three years at the front line of helping to battle the coronavirus, a significant number of pharmacy workers burned out and left the industry. In the coming years, the industry is expected to expand more slowly than the national average for other industries, according to a 2021 job outlook report by the Bureau of Labor Statistics. The report said most of the openings would “result from the need to replace workers who transfer to different occupations or exit the labor force.”

What’s Next: Expect more Walmart updates.
This week, Walmart’s executives, store associates and suppliers are gathered in Bentonville, Ark., for the retailer’s annual shareholder meeting.

The company is expected to explain its vision for the year ahead, giving updates about its consumer base, technological innovations and store remodels. Its health business will most likely be a topic of interest for investors and analysts.

Why PBMs, or pharmacy benefit managers, are the focus of new bills in Congress : Shots

Pharmacy benefit managers are middlemen who work with drug companies and insurers, helping set the retail prices for prescription drugs Americans rely on for their health. They’re now the subject of a number of new bills in Congress.

Robert F. Bukaty/AP

In recent months ominous ads about prescription drugs have flooded the TV airwaves. Perhaps by design, it’s not always clear who’s sponsoring the ads or why.

Or, for that matter, why now?

The short answer is that Congress is paying attention. House and Senate members from both parties have launched at least nine bills, parts of which may be packaged together this fall, that take aim at pharmacy benefit managers, companies that channel prescription drugs to patients. Here’s a primer to help you decipher what’s happening.

What are pharmacy benefit managers?
Known as PBMs, these companies were created in the 1960s to help employers and insurers select and purchase medications for their health plans. The industry mushroomed as prescription drug spending grew about 200-fold between 1967 and 2021. In addition to negotiating discounts with manufacturers, PBMs set payment terms for the pharmacies that buy and dispense the drugs to patients. In effect, they are the dominant middlemen among drugmakers, drugstores, insurers, employers, and patients.

New drugs. Cheaper drugs. Why not both?

How big is the PBM industry?
There are around 70 PBMs in the U.S. Through mergers, three of them — CVS Caremark, Optum Rx, and Express Scripts — have come to control 80% of the prescription drug market, and each brings in tens of billions of dollars in revenue annually. The PBMs control the drug pipeline from manufacturers to the pharmacy counter.

Their buying power allows them to obtain discounted drugs for health plans while setting prices and terms for sales at drugstores. The big three are part of massive conglomerates with important stakes in almost every sector of health care; each of them owns a powerful health insurer — Aetna, UnitedHealth, and Cigna, respectively — as well as pharmacies and medical providers.

For example, UnitedHealth contracts with 70,000 doctors, making it the biggest employer of physicians in the country. CVS Health, with the big pharmacy chain, also owns Caremark and Aetna. Secret price negotiations and hidden corners of each PBM-linked corporation make it hard to track where the money ends up.

Why am I seeing all these ads about PBMs?
Other sectors of health care are alarmed by the power of the PBMs and are appealing to the Biden administration and Congress to rein them in. Drugmakers are especially up in arms (more on that later), but employers, pharmacies, doctors, and even patients chafe at PBM practices like “spread pricing,” in which the companies pocket money negotiated on behalf of health plans.

Non-PBM-affiliated pharmacists, from mom and pop stores to large chains like Kroger, say the PBMs squeeze their businesses by forcing them to sign opaque contracts that include clawbacks of money long after sales take place. PBMs often steer patients using expensive drugs to their affiliated pharmacies, cutting revenue to independents.

Doctors say PBMs act as gatekeepers for the insurers they represent, blocking or slowing coverage of necessary drugs.

Finally, the pharmaceutical industry has lost a share of sales revenue to PBM middlemen in recent years — even while getting most of the bad publicity for high drug prices. (The median launch price for newly marketed brand-name drugs went from $2,100 to $180,000 a year between 2008 and 2021, yet net revenues for drug companies have stagnated in recent years.)

PBMs in some cases prefer high producer list prices, because the rebates that drugmakers pay the PBMs in exchange for favorable health plan coverage of their drugs often are calculated as a percentage of those list prices.

Who’s paying for the ads?
The Pharmaceutical Research and Manufacturers of America, the trade group for most of the big drug companies, is the top driver of the anti-PBM campaign. Some of the ads are sponsored by the PBM Accountability Project, a pop-up lobby, funded partly by the drug industry, that includes unions and patient advocates whose membership complains of restrictive PBM and insurance industry policies.

In one PhRMA ad, a smarmy guy in a suit snatches away a young woman’s prescription. The Pharmaceutical Care Management Association, the PBM trade group, has responded with its own ads, blaming drug companies for high prices and for “targeting your pharmacy benefits.” AHIP, the health insurance lobby, has piled on with its own campaign.