Wal-Mart offers 90-day generics at $10
Posted on Tuesday, May 6, 2008
URL: http://www.nwanews.com/adg/Business/224938/
Wal-Mart Stores Inc. expanded its drug-pricing program Monday to offer 90-day supplies of about 350 of the most commonly prescribed generic drugs at $ 10.
The company also lowered prices to $ 9 on 30-day supplies of several generic forms of drugs to treat women’s ailments such as osteoporosis, breast cancer and hormone deficiency.
The latest move builds on the Bentonville-based retailer’s initiative, launched in September 2006, that dropped the price of hundreds of generic drugs to $ 4. H. Lee Scott, Wal-Mart’s president and chief executive officer, and other company officials also have been involved with efforts on the national level to streamline health-care systems and control the escalating cost of medical treatment.
“This drives costs out of the system, it’s what we do, and it’s why it’s working for us,” Bill Simon, executive vice president and chief operating officer for the Wal-Mart stores division, said Monday in a conference call with reporters and retail analysts.
In addition to the prescription drug initiative, company officials said prices have been cut to $ 4 for its Equate brand version of some nonprescription drugs, such as Pepcid, Claritin and Zantac.
In response to a question, Simon said the low drug prices generate more pharmacy business in the company’s stores, but he declined to release any figures.
“It is a virtuous circle. When our volume goes up, we’re able to buy better,” he said.
Several other retailers matched Wal-Mart’s 2006 move or made other adjustments in their drug pricing.
Target Corp. will match the latest move “to remain competitively priced with Wal-Mart,” spokesman Susan Giesen said. Kmart Corp. did not return a call seeking comment Monday.
Target has been selling some generics at $ 4 for a 30-day supply. Kmart has been selling 90- day supplies of several generic drugs for $ 15.
Wal-Mart says its $ 4 drug program had saved its customers $ 1. 16 billion nationally as of April 28 and Arkansas customers $ 36. 5 million. Company spokesman Deisha Galberth said Wal-Mart had no estimate of how much consumers have saved overall as other retailers lowered their prices to stay competitive with Wal-Mart.
John Norton, public relations manager for the National Community Pharmacists Association, said independent pharmacists have not seen a mass exodus of customers as a result of Wal-Mart’s 2006 move.
“The list that Wal-Mart’s offering isn’t all that comprehensive,” he said.
However, he said the group remains concerned about the “commoditization” of prescriptions, and whether patients receive sufficient counseling about their medications at high-volume pharmacies such as Wal-Mart’s.
Simon said the new emphasis on 90-day prescriptions for maintenance drugs would free up staff time in Wal-Mart pharmacies because customers won’t be refilling their prescriptions as frequently. However, the company does not expect a drop in overall customer traffic.
Adrienne Shapira, a retail analyst with Goldman Sachs, said the new program is likely to boost traffic.
In a research note to clients, she said Wal-Mart could “gain critical share across its female primary shoppers with drugs targeted for breast cancer, menopause and especially osteoporosis.”
She said Wal-Mart already has received a “clear public relations benefit” from its low-priced generic drug program. Wal-Mart officials said the new 90-day program likely would attract some customers currently using mail-order prescriptions. Wal-Mart’s stock closed Monday at $ 56. 97 a share, down 53 cents or 0. 92 percent, in trading on the New York Stock Exchange. The stock has traded as high as $ 59. 09 and as low as $ 42. 09 in the past year.
To contact this reporter: spainter@arkansasonline. com