Walgreen, Caterpillar In Prescription-Drug Pact

Walgreen Co. (WAG) will offer prescription drugs directly to Caterpillar Inc. (CAT) for its workers and retirees, saying its program will increase savings and pricing transparency.

It will also give Caterpillar workers discounts on non-drug products while the two companies also look at potential expansion of the effort to include health-and-wellness efforts. Walgreen also manages workplace health-and-wellness centers.

The deal comes at a time of heightened uncertainty over the future of health care in the U.S. President Barack Obama's massive reform initiative has been mired in Washington amid outcry over the costs and confustion about what the bill will entail.

The drug-pricing practice is similar to that which Caterpillar is using under a pilot program with Wal-Mart Stores Inc. (WMT). That pact, which is unaffected by the Caterpillar deal, remains in effect through year's end, said Caterpillar spokesman Bridget Young.

Caterpillar's pharmacy benefits manager, Todd Bisping, praised Walgreen for helping to eliminate "unnecessary and hidden costs in the prescription drug supply chain and ... effectively deliver lower cost solutions."

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [e-mail]