Wal-Mart To Sell Bargain Generic Drugs

Retail Giant Announces Plans To Greatly Reduce Prices For Prescriptions

(CBS/AP)  Wal-Mart, the world's largest retailer, plans to slash the prices of almost 300 generic prescription drugs, offering a big lure for bargain-seeking customers and presenting a challenge to competing pharmacy chains and makers of generic drugs.

Wal-Mart will offer nearly all of the reduced-price medications for just $4 for a typical monthly dosage. The diabetes drug Metformin, for example, costs more than $25 a month at a national drugstore chain. Wal-Mart’s price of $4 means a savings of more than $250, reports CBS News correspondent Anthony Mason. Lisinopril, a drug that treats high blood pressure, costs more than $17 per month at another major chain. A price cut to $4 would save a patient $200 a year.

Wal-Mart Stores Inc. will launch the program Friday at 65 Wal-Mart, Neighborhood Market and Sams' Club pharmacies in Florida's Tampa Bay area. It will be expanded statewide in January and rolled out to the rest of the nation next year, company officials said Thursday.

The news sent the shares of big pharmacy chains like Walgreen's and CVS slumping because of fears that Wal-Mart's price cuts of up between 20 percent and 90 percent could cost them market share. Shares of prescription drug management companies and some generic drugmakers fell as well.

Analysts said the risks to Wal-Mart are slim because profit margins on most of the drugs already are low — and the program could help the Arkansas-based retailer address an image problem stemming from its policies on health insurance coverage for employees.

“They are doing something that may be good for consumers, but they don't have altruistic motives,” said Patricia Edwards, a portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle. “They are capitalists. They still need to make a profit.”

Tampa Wal-Mart pharmacy customer Pat Sullivan, a retired Massachusetts police officer, said $4 generic prescriptions would be a tremendous help.

“I'm on disability and my benefits run out by the end of the month,” he said. “It comes down to where do I go for a $100 prescription? I have no outlet other than to break a pill in half and take half today and half tomorrow.”

The $4 prescriptions are not available by mail order and are being offered online only if picked up in person in the Tampa Bay area.

Bill Simon, executive vice president of the company's professional services division, told reporters that the generic drugs would not be sold at a loss to entice customers into the stores, a strategy that has been used in Wal-Mart's toy business.

“We're able to do this by using one of our greatest strengths as a company — our business model and our ability to drive costs out of the system, and the model that passes those costs savings to our customers,” he said at a Tampa Wal-Mart. “In this case, we're applying that business model to health care.”

Simon said Wal-Mart is working with the 30 participating drug companies to help them be more efficient. “We are working with them as partners. We are not pressuring them to reduce prices,” he said.

David W. Maris, an analyst at Banc of America, said in a report issued Thursday that the plan could “squeeze the generic manufacturers.” But Kathleen Jaeger, president and CEO of the Generic Pharmaceutical Association, disputed that, saying Wal-Mart's plan will have “little impact” on its members.

The initiative follows a series of moves by Wal-Mart to improve its health benefits since last October. They include relaxing eligibility requirements for its part-time employees who want health insurance, and extending coverage for the first time to the children of those employees. Last October, Wal-Mart offered a new lower-premium insurance aimed at getting more of its work force on company plans.

Wal-Mart's shares fell 41 cents to close at $48.46 in trading Thursday on the New York Stock Exchange. But shares of the nation's largest drug chain, Walgreen Co., slumped 7.4 percent and the stock of rivals CVS Corp. and Rite-Aid Corp. dropped more than 8 percent and more than 5 percent, respectively. Shares of generic drug makers Barr Pharmaceuticals Inc.'s and Mylan Labs also fell, as did the stock of Caremark RX Inc., a pharmacy benefit manager firm.

Still, Rite-Aid and Walgreens executives both noted that Wal-Mart's list of the discounted generics contains only a small percent of the 1,500 and 1,800 generic drugs each offers, respectively.

Faced with soaring drug costs, consumers are increasingly turning to generic drugs, which often are made by multiple companies after the original patent on the medicines expire. The average monthly cost for a generic drug prescription is $28.74, according to the National Association of Chain Drug Stores. For branded drugs, that figure is $96.01.

The Generic Pharmaceutical Association, a trade association, said generic medicines account for 56 percent of all prescriptions dispensed in the United States, but only 13 percent of all dollars spent on prescription drugs.

[cathaleen]

I think it's very good for people to be able to be able to get their drugs discounted. The drug companies will try their scare tactics telling people that the drugs are inferior. That's not true. When a drug go off patent - it can be dispursed by other companies under different names - so the generic drugs are the same because they have to be made under FDA regulations.

[gigsmom]

I think it is a good idea that Walmart is finally doing that with the prescription drugs,but I guess I don't understand why it will take 1 yr to get it in other states,and why they are just limiting it to Florida at the moment.

[ronniehm]

"Wal-Mart Stores Inc., facing pressure from critics who call its employee health care coverage inadequate..."

What does that have to do with selling generic drugs?

[PenniH]

I think it interesting that everyone bashes Wal-Mart, but the parking lots are always full. What does this say about us? A few years ago it was Microsoft, now it is Wal-Mart.
Is this issue really this important? How about using this energy to fight world hunger, child abuse, international peace, world health, or any of many other issues affecting this world?
Wal-Mart is a business. In a country based on free interprise. Why do we think we have the right to tell someone how to run their business as long as they are not breaking any laws?
Are we that jeolous of success? It is sad that so many petty and narrow minded people can't find a legitimate outlet for their spite.

[lovelylady4]

"Critics contend that the company's benefits are too stingy, forcing taxpayers to absorb more of the cost as the workers lacking coverage turn to state-funded health care programs."

This was listed in the fast fact under the picture of the prescription with Ben in the background... so I guess that is what the two have in common... Great Idea... Makes you wonder what the mark up on these drugs really are.

[shutupmurtha]

Uh oh, another hit for the Democrats. What is going on first we have American Hating Dictators supporting what the dems have been saying for the last 5 years, bahsing our government, our President, and Our Country, Now the "great Enemy" of this country according to the dems, Wal-Mart, is offering even more benefits to the Democrat's base.

[shutupmurtha]

They have to attack wal-mart because there is nothing Legitimate for them to cry about, that is why they come up with all these conspiracy theories to undermind the Administration. Now the world is seeing how backwards this party is.
What makes sense about killing babies and doing away with the Death penalty for murders? What makes sense about screaming hate all the time and giving no solutions? What makes sense about dumb conspiracy theories as basis for arguments? What makes sense about reaising taxes on those who pay 98% of the tax already? what makes sense of pulling out of war in the middle of it? what makes sense about allowing ILLEGAL immigrants to come in our country when they already fill well over 25% of the federal prisons? what makes sense about calling a religion that blows people up nearly every day a peaceful religion and calling a relgion that has done more for the needy and hungry in the world than any government the real threat based on an reactionary event that happend hundreds of years ago? What makes SENSE about LIBERALISM?
And according to the democrats the ENEMY isnt Islam, terrorism, or Lunatic Dictators... It is WALMART, Global Warming, The Auto Industry, and America

[ajmystic]

I have used generic drugs since they first became available. I think it is a good idea for Wal-Mart to be selling them so that people can afford them. I just wish some of the drugs that my husband and I take were available in generic. It still costs us $35-$50 every time we get our prescriptions filled, so any reduction in price would be great. This is a boon for those on limited incomes and I applaud Wal-Mart for taking the lead. I seriously doubt we will be seeing this type of help from any of the big drug store chains anytime soon.

[heresmy2cent]

Kudos to Walmart! This is an ingenious marketing idea that will benefit the drug buying public immensely. It's ironic that it takes a private business to offer an affordable solution to purchasing generic medications rather than the brain donors in Washington, DC, who are too busy debating over flag burning or *** marriage.

[denhugli]

This is a great step, in affordable medicine. Being retired Military we watched the Government change our healthcare.

[expeditionmo]

Please help me to locate the drugs that will be available to Illinois sometime next year. I've been searching everywhere under Walmart and only find stories about the lowering of prices.
If there is a direct site, please email it to me so we can check to see if our medication is listed.
Thank you.

[joat247]

This sounds great as a start...but as a person who can not afford my meds (which are not available in generics) and have gone without them to put food on my table, there is alot more that can be done and not just by Wal-mart.

I do give them alot of credit and hope that this program spreads to other stores and brand name drugs also.

[urichhai]

As i am reading thru this I see some great comments. BUT *** does the government have to do with it,where did they even mention Democrats.
Wallmart may have great prices and we may all shop there but that dosn't mean they are great.
People work for them because they have too but if given a better place with decent pay and benefits I bet they would leave there in a second.
look what happened in Chicago try to pass a law that makes them give there workers a decent pay rate and they threaten to pull out and not build any more stores. Lets look at the BIG PICTURE folks!!!!!! We can afford lower prices cause we screw our workers

[bwright923]

i work at a pharmacy. the markups of some drugs are suprisingly high, where as others are not much above cost. the ones wal-mart is marketing are the lowest cost ones. Most people take 4-5 prescriptions at least with some taking hundreds of dollars worth every month and are not going to drive all over town to fill all of them at the best price. wal-mart knows this and so they lure you in with the 4 dollar ones and get ya on the others you need. besides, the prices only affect thoes without coverage. if you have coverage, the prices are going to be the same copay everywhere.

[grazinggoat]

Hey guys, imagine Walmart being purchased by AlQaeda? It'd be a good way for Taliban to distribute effectively its drug production...

[chipros]

Congratulations to WalMart...drug prices are so inflated as to keep people from living as comfortable a life as possible, especially those with financial difficulties. It may eventually even help with insurance prices, given the nationwide availability of the program. Alterior motives? Only their board knows, but for now, some people will NOT have to choose between food and meds. If WalMart can lower the prices of drugs this much, why can't other stores? And why were the prices allowed to be so high, anyway? I've owned a business, and understand profit...but I gave away food from my restaraunt, rather than waste it. And I only charged enough to make a REASONABLE profit. The normal prices aof drugs are the equivelant of price gouging at the gas pumps. Who benefitted there? At least the government finally stepped in to stop that. It's time medical care, medicine, and health access become affordable to everyone...not just those who can afford to get real medical care. Wish the newscaster would get their copy checked before the broadcast, though...last night they said the price reduction affected over 400 meds, this morning they said 300. Thanks for reading.

[mjv2944]

Man, I bet the big drug companies don't like this one, because it will probably grow and cut in to their profits. But, I bet Dubya and his boys will come to their rescue. Watch gas prices go up after the election. Corrupt, corrupt corrupt, worst I've seen in my 62 years.

[bwright923]

what happened to the comments from yesterday... do they get purged?

[mombiscaro]

This will help me personally sooooo much! I have no ins., no disability, no medicaid, but unable to work due to narcotics I have to take till I can have hand and neck surgery, plus I have poss. breast cancer. I am a military dependant(Daughter and son-in-law are active duty in Little Rock, but I get no benefits as opposed to 100% I had oversea's in Guam. They flew us here for surgery(no Neurosurgeon in Guam) and Tricare had NO benefits, so I have had to wait 6 mos. to become a resident just to apply for UAMS, but still have to pay for my prescriptions. There has been MANY medications I was unable to get due to the lack of money. I am not able to work by law or medically. I am a Nurse of 27 years, a widow and never thought I would be in this position. I am so in favor of this, God willing! God Bless and Thank You!

[techattarget]

I also have been reading everyone's comments but i agree with the person that worked at the pharmacy and reazlized that they are luring innocent people in. I also work at pharmacy and have been going through there list of cheap generics and not one of the are above $4 at cost. Almost any pharmacy could match Wal-Mart. Just Ask. My theory is if you can go to CVS, Eckerd or Target and get them for the same price, do it then you won't be waiting 45 min to an hour for one script. Its not worth it.
Also people need to realize that some insurances have deductibles, these cheap generics are going to be processed as cash, so you won't meet your deductible. So when you go to get a perscription not on "the list" than you are going to be hit with a huge co-pay.

Be realistic!

[iloveparrots]

Sorry people but Wal-Mart did not come up with this idea first. Kmart has been selling a 3 month supply of certain maintenance generics for $15.00 for more than a year in several regions. These include drugs such as metformin, lisinopril, isosorbide mononitrate, and many, many more. It is for anyone with or without insurance. This just goes to show you how much power and influence Wal-Mart has. I bet thay would never admit they got the idea from someone else!