- The Washington Times - Thursday, October 5, 2006

ASSOCIATED PRESS

Wal-Mart Stores Inc. expects to offer $4 prescriptions for some generic drugs in most states this year after expanding the low-cost program from a test market to all of Florida ahead of schedule, the world’s largest retailer said yesterday.

Wal-Mart started the program last month in the Tampa area in what it called an effort to save working Americans money on health care. But critics said it was a publicity stunt to draw in business and a grab for a bigger share of the prescription drug business.

At the time, Wal-Mart said it would expand the Tampa test statewide by January and nationally next year.

But customer demand was strong and Florida officials asked for a faster rollout, Wal-Mart said. It announced the statewide rollout effective today at a press conference with executives and Florida Gov. Jeb Bush.

It also is accelerating the national plan, said Bill Simon, executive vice president of Wal-Mart’s professional services division.

“I would expect that we would be in most of the U.S. this year. That’s the plan,” Mr. Simon said.

Target Corp., the country’s No. 2 discounter behind Wal-Mart, said it would match its rival’s lower prices in Florida as it did already in the Tampa area.

Walgreen Co., one of the nation’s biggest drugstore chains, will not cut prices. Spokesman Michael Polzin said 95 percent of Walgreen customers have prescription insurance and the Deerfield, Ill.-based chain has seen no significant effect on its Tampa pharmacies from Wal-Mart’s program.

Wal-Mart also raised the number of generic prescription drugs offered under the $4 for a month’s supply plan to 314 from 291. The new number comprises 143 drugs in a variety of dosages and solid or liquid forms that together make up the total, up from about 125 drugs when the program started, Wal-Mart said.

It is the latest health care initiative by Wal-Mart since late last year as the nation’s largest private employer seeks to deflect union-backed criticism of its worker benefits.

Health care analysts said any price competition is welcome, but noted that generics are less of a burden to consumers than higher-priced brand-name drugs that are still under patent.

“Generics are not very expensive in the first place. It’s a good thing to make generic drugs cheaper, but that isn’t where most of the big costs are,” said Gary Claxton, a vice president of the Kaiser Family Foundation, which analyses health care issues.

Critics including independent pharmacies that compete with Wal-Mart called the plan a publicity stunt to get more shoppers in the door while covering only a small fraction of some 8,700 generic drugs approved by the U.S. Food and Drug Administration.

“It’s a loss-leader type program that is solely aimed at getting people in the door at Wal-Mart. Most people going to get their prescriptions filled will be disappointed,” said Charlie Sewell, executive vice president of government affairs at the National Community Pharmacists Association (NCPA). The NCPA represents about 24,000 non-chain pharmacies.

Wal-Mart disputed that it was selling the drugs at a loss. It has said its size and supply chain efficiency allows it to sell the $4 drugs and still turn a profit.

Wal-Mart said the $4 generics account for about 30 percent of all prescriptions filled at its Florida stores.

Consumers could save an average of 20 percent, and up to 90 percent on some prescriptions under the Wal-Mart program. The drugs covered are used to treat conditions ranging from high-blood pressure to allergies.

Mr. Simon said within 10 days of the Sept. 21 start of the program in the Tampa area, Wal-Mart filled 36,000 new prescriptions. He said the company hopes to expand the program beyond Florida “to as many states as possible” in the weeks ahead.

Wal-Mart shares fell $1.14, or 2.3 percent, to close at $48.41 on the New York Stock Exchange. They are still near the upper end of their 52-week range of $42.31 to $50.87.


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