Wal-Mart Expands Its $4 Generic Drug Plan
Posted on: Tuesday, 6 May 2008, 06:00 CDT
The generic drug war is heating up.
Wal-Mart Stores has expanded its list of generic prescription medications offered for $4 for a 30-day supply to more than 1,000 drugs.
It also unveiled a program to offer 90-day supplies of some generics for $10, which will compete with mail-in prescription services, and added over-the-counter allergy and antacid treatments to the mix.
Ultracheap generics is not a new concept. Kroger, Randalls, Walgreens, CVS and H-E-B all have some version of $4 and $5 generic drugs or discounts on offer for customers with loyalty cards.
But Wal-Mart is seen as a retailing behemoth with the power to drive prices down across an industry with its relentless cost-cutting.
According to the company's estimations, Wal-Mart's generic drug program has saved U.S. consumers nearly $1.2 billion since it first launched in 2006.
Texas has reaped the biggest single-state benefit with savings of $149 million.
Wal-Mart in-house brand Equate is on everything from artificial tears to acetaminophen tablets to sleep aids.
CVS spokesman Michael DeAngelis brushed aside Wal-Mart's new offering, saying, "Consumer price promotions come and go."
CVS often has more convenient locations, drive-through pharmacy windows and 24-hour stores that customers want, DeAngelis said.
Paul Beahm, Wal-Mart's senior vice president of general merchandise for pharmacy, said this is not a one-time gimmick or sales trick.
"This is not a loss leader for us. We're in business to make money, but we also know health care is one of the top three issues consumers think about," he said. "We don't want to move costs around. We want to eliminate costs from the health care system. That fits with our everyday-low-price philosophy."
Wal-Mart's announcement included several expanded women's health products, including a $9 generic version of Fosamax, which treats osteoporosis.
Another part of the program addresses over-the-counter drugs that were once only offered by prescription.
Some consumers with insurance used to pay $10 co-pays for Claritin with a prescription.
When the brand-name allergy medication started being sold over the counter without a doctor's note, the price went up for some.
So even though it was more readily available, it was often more expensive.
"Over-the-counter products are a natural extension," Beahm said. "Some over-the-counter medicines were prescription-based a few years ago with reasonable co-pays, but when they went over-the-counter, the price went up, too."
Russell Richard, manager of consumer affairs for Kroger, said the grocer's $4 generic drug program has steadily gained traction since it was rolled out earlier this year.
In fact, all kinds of generic brands are finding favor as Americans try to cut spending, according to a new survey from Information Resources that shows 75 percent of U.S. consumers say private-label brands are quality products.
Kroger reports its private-label brands of food and drugs account for 20 percent of total sales.
That's up from just 2 percent two years ago.
Source: Houston Chronicle
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