ONLINE PHARMACIES: Major Chains Offer Lower Prescription Costs Online
Some of the nation's largest drug store chains, including CVS Corp., Walgreen Co., Rite Aid Corp., and Eckerd, are "[w]aging war in one of the scrappiest battles" on the Web, as their competing online pharmacies are offering prescription drugs at prices 10% to 30% lower than the in-store costs, the Wall Street Journal reports. The fierce competition has retailers monitoring rivals' prices so they can adjust their own. Eckerd's Vice President of Electronic Commerce Jim Smith explained, "Prices on the Web are so visible, that you have to be competitive with online providers." In a sampling of some common online drug prices, the Wall Street Journal found that a 30-pill prescription of the allergy drug Claritin was sold on walgreen.com for $58.99, with free mail delivery, compared to its $67.19 price tag at a Newark, NJ, store -- a savings of 12%. A 30-pill prescription of the cholesterol-lowering Lipitor sold on drugstore.com for $74.94, with free mail delivery, compared to $105.98 at a Rite Aid store in Albany, NY -- a 29% savings. Despite the price discrepancies, officials at the major chains indicated that they have seen no evidence that in-store business has taken a hit because of Internet sales. Last year, Internet prescription sales represented a small portion -- $160 million --of the $101 billion U.S. drug market. Some contend that patients prefer the convenience of drugstore pick-up, as many prescription drugs are "urgently needed medications," such as antibiotics or painkillers. In addition, CVS.com CEO Tom Pigott said that the online pharmacy actually has increased business in certain areas, such as California, where CVS does not operate any stores.
Limited Access for the Neediest
Despite the discounts, some are concerned that those who most need the price breaks are the very people who have no access to the Internet, particularly the poor and the elderly. While people with prescription drug coverage pay the same amount online or in stores, the nearly 70 million without prescription benefits can receive the discounted drugs. AARP lobbyist Tricia Smith said, "Older Americans and those who have no insurance are the stand-alone groups paying higher prices, and they can least afford it. Ironically, they are among the least likely to access Internet prices so they are left out of the opportunity" (Johannes, 1/10).