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Junkie
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Walmart is at it again.
It seems like Walmart is up to its old tricks again - bringing affordable goods and services to the communities they serve. Those "mom and pop" companies like Walgreens ,Rite Aid and CVS are in trouble unless they lower their prices too. You have to love good old fashion capitalism and those greedy capitalist fighting for market share. 
Quote:
September 21, 2006 11:46 a.m. EDT
GENERIC DRUGS FOR $4
Wal-Mart Tests in Florida
Its $4 Generic-Drug Plan
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
September 21, 2006 11:46 a.m.
Retail giant Wal-Mart Stores Inc., eyeing a long list of brand-name pharmaceuticals about to lose patent protection, announced plans to test a low-price strategy for generic drugs sold at its pharmacies.
The Bentonville, Ark., company said it will cut the price of nearly 300 generic drugs sold at Wal-Mart store pharmacies in Florida's Tampa Bay area to $4. The company plans to expand the program to all Florida stores in January 2007, and in other states next year.
Wal-Mart said the program will be available to customers with insurance as well as the uninsured.
"Each day in our pharmacies we see customers struggle with the cost of prescription drugs," said Wal-Mart Chief Executive H. Lee Scott, Jr. "By cutting the cost of many generics to $4, we are helping to ensure that our customers and associates get the medicines they need at a price they can afford."
Wal-Mart lined up political support for the program before it announced the program. In Wal-Mart's statement, Florida Gov. Jeb Bush is quoted as saying: "This act of good corporate citizenship will help consumers manage health-care costs, while benefiting Florida's growing population."
The new program includes medications to treat allergies, cholesterol, high blood pressure and diabetes. The discount giant said some antibiotics, antidepressants, antipsychotics and prescription vitamins will also be included.
Under the new program, a 30-day supply of diabetes drug Metformin would cost $4, which represents savings of nearly 50% from the prior price point, said Bill Simon, executive vice president of the Professional Services Division for Wal-Mart. A 30-day supply of generic blood-pressure drug Lisinopril would also cost $4, compared with $12 for a brand-name version.
"Fifty-bucks for a year's supply of prescription drugs is a pretty darn good deal for consumers," said U.S. Senator Bill Nelson, a Democrat from Florida, according to the release. "Because Wal-Mart has the ability to shape the market, maybe other retailers will follow suit."
"These are medicines for diabetes, cardiovascular disease, asthma, colds and infections -- the kinds of medicines that working families need so they can treat illness, manage conditions and stay well," Sen. Simon was quoted as saying in the release.
Shares of national drugstore chains dropped following the announcement. In late-morning trading, CVS Corp. shares fell 9.4%, or $3.29, to $32.08, Rite Aid Corp. shares skidded 4.6%, or 23 cents, to $4.53; and Walgreen Co. shed 5.4%, or $2.69, to $47.26, all on the New York Stock Exchange.
The generic-drug market is a $27-billion-a-year business and is a key part of efforts to lower health-care costs.
A low-price guarantee by the company, because of its sheer size, could affect the pricing of existing and new generics coming to market. Generics made up about 56% of all prescriptions filled last year, but only 13% of drug spending. Exclusive agreements to provide Wal-Mart's more than 3,000 U.S. stores with a particular drug could prove a boon for those selected.
Over the next two years, analysts estimate patents on about 75 brand-name drugs, including blockbusters like antidepressant drug Zoloft and Norvasc blood-pressure medication, will lose protection. The resulting wave of new generics will help pharmacies, which get the majority of their profits from generic drugs. Profits on brand-name drugs are typically less because of the manufacturers' control over pricing and distribution.
Prices of generic drugs, however, vary widely from pharmacy to pharmacy. A Wal-Mart pledge to offer the lowest prices on widely used generics could spur other retailers to do the same, say industry observers.
The pledge could also benefit Wal-Mart. Its pharmacy business has stagnated recently. It reported pharmaceutical revenue of about $19.94 billion in its fiscal year ended Jan. 31, compared with $20.61 billion a year earlier.
The company has been delving into offering convenience clinics at its stores. It has signed agreements to open about 50 in-store clinics with companies including Intrepid Holdings Inc. and InterFit Health, both based in Houston, to provide care for common, minor maladies.
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http://online.wsj.com/article/SB1158..._whats_news_us
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