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Wal-Mart refills its prescription program

The retail giant is expanding its list of $4 generic medicines. Critics call it a stunt.

By MARK ALBRIGHT, Times Staff Writer
Published September 28, 2007


Pharmacy technician Jasmine Hooks, 19, fills prescriptions at the Wal-Mart Supercenter on Gunn Highway in Tampa.
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[John Pendygraft | Times]
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photo
[John Pendygraft | Times]
Prescription medications that are now included in Wal-Mart's popular drug program. The drugs pictured were announced as additions to the program.

TAMPA - Wal-Mart Stores Inc. on Thursday expanded its popular $4 generic prescriptions list, claiming the 1-year-old program now covers more than 95 percent of common diseases treatable by medicine.

The expansion, which also adds family planning with a fertility and two types of birth control pills to the list of bargain-priced generics, adds commonly prescribed generics Warfarin blood thinner, the beta blocker Carvedilol and a generic equivalent to the pricey toe fungicide Lamisol on the list of $4 drugs for a 30-day supply.

Added medications will extend treatments for glaucoma, asthma, attention deficit disorder and acne. In the case of branded Lamisol, which sells for $337, Wal-Mart dropped the price of a generic equivalent that hit the market last month at $119 to $4.

But half the 24 drugs added to the list of 361 are different dosages of the commonly prescribed blood thinner and beta blocker used by heart patients.

And while Wal-Mart got suppliers to cut costs to get to $4, the chain settled for $9 on the family planning drugs because suppliers would not go lower. That's still less than half what the retail price had been.

The news was released as Wal-Mart celebrated the first anniversary of the $4 offer launched first in the Tampa Bay area that spread nationwide within months and "exceeded all our expectations," said Bill Simon, chief operating officer of the Wal-Mart stores division of the world's largest retail company.

"We knew it would be big, but we greatly underestimated how big," he said. "We've seen dramatic sales results."

Indeed, 40 percent of the prescriptions sold at Wal-Mart and Sam's Club comes from $4 generics. Simon figures the percentage will rise to the mid 40s, thanks to drugs added this week.

"Our store is two years old, but our pharmacy business doubled in the past year," said Lori Sanders, pharmacist at a Gibsonton supercenter.

While many rival pharmacies such as Target matched Wal-Mart's $4 prices, many rivals saw the power of the offer. Kmart dialed up promotion of its $15 for a 90-day supply on many generic maintenance drugs and beats Wal-Mart's $4 offer by 11 cents for a 30-day order. Publix store managers stopped matching the Wal-Mart price when the supermarket chain last month started offering 14-day supplies of seven generic antibiotics free with a prescription.

The big drugstore chains like Walgreens get virtually all their business from people with health insurance. With the average generic co-pay at $5, they have not budged their pricing.

Meanwhile, Wal-Mart is studying $10 for a 90-day generic supply, but demand does not look strong enough.

Wal-Mart pharmacies posted double-digit sales increases in the past year luring new customers and patients who had skipped taking medications because they could not afford them.

Critics such as the National Community Pharmacists Association, which represents independent drugstores called the program a publicity stunt. That's because it covers only the top selling fraction of 8,700 generic drugs approved by the Federal Drug Administration. Others claim Wal-Mart is selling the drugs at a loss to get customers in the door to buy other things. Others said Wal-Mart was only discounting older, cheap formulations by $1 or $2.

Wal-Mart, however, insists it makes money on each sale. In the past year its customers saved $610-million based on the difference between what they had been paying Wal-Mart before $4 generics. In Florida, savings amount to $44-million.

It would have been more, but nine states have laws forbidding the sale of generics at less than $9 a prescription.

"Selling generics cheaper has been a sustainable pharmacy business model for years," said Simon. "It's certainly a more sustainable model than selling branded new drugs at very high prices until the patent rights expire and they go generic."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

What's next

To see whether other big retailers with pharmacies move to match Wal-Mart's prices. Consumer groups praised the expanded generic drug program but said it does not address the often crippling cost of brand-name prescription medicines.


More medications for $4

What: The world's largest retailer added drugs priced at $4 covering glaucoma (Timolol Maleate), asthma (Albuterol), blood pressure (Carvedilol), fungal infections (Terbinafine), and acne (Benzoyl Peroxide), among others.

Two prescription birth-control drugs and one fertility drug were added at $9, a cost Wal-Mart said could not be brought down further.

Why: Wal-Mart launched the $4 generics program last year along with other health initiatives to counter political pressure on its labor practices, including health insurance.



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[Last modified September 27, 2007, 23:06:00]


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