Target operates 1,443 Target stores in 47 states.
Wal-Mart Thursday said it would 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.
The drugs will be sold for as little as $4 for a month's supply and include some of the most commonly prescribed medicines such as Metformin, a popular generic drug used to treat diabetes, and the high blood pressure medicine Lisinopril.
Wal-Mart 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.
A news release issued Thursday night did not say if Target would also expand its program as Wal-Mart does so, and the company did not immediately return a phone call seeking comment, but the statement said Target's long-standing practice is to be price-competitive with Wal-Mart.
A monthly supply of Metformin costs more than $25 at a national drugstore chain, reports CBS News correspondent Anthony Mason. Wal-Mart's (and presumably Target's) price of $4 means an annual savings of more than $250.
Lisinopril, a drug that treats high blood pressure, costs $17.49 at another major chain. A price cut to $4 would save a patient $200 a year.
The news sent the shares of big pharmacy chains like Walgreen's and CVS slumping because of fears that Wal-Mart's price cuts could cost them market share. Analysts said consumers will save an average of 20 percent and up to 90 percent in some cases. 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.
"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."
The program also could help the Arkansas-based retailer address an image problem stemming from its policies on health insurance coverage for employees.
"It's clearly an intention to blunt the deserved criticism for the miserable health coverage that Wal-Mart provides its employees," Ron Pollack of Families USA told CBS News.
Tampa Wal-Mart pharmacy customer Pat Sullivan, a retired Massachusetts police officer, said $4 generic prescriptions would be a tremendous help.