Some Criticize Wal-Mart Discount Drug Program
Wal-Mart's discount generic prescription drug program is "causing a ripple effect in the big-box retail industry," although it is "drawing criticism from drugstores that say the discounts will not result in significant savings for most consumers," the Boston Globe reports (Rowland/Krasner, Boston Globe, 11/17).
Wal-Mart in September announced the program, under which some company pharmacies would sell 30-day prescriptions of certain generic medications for $4. The company on Thursday announced plans to expand the program to 11 additional states and to add 17 medications to program. Prior to the latest announcement, the program was introduced in 27 states and covered 143 different generic medications in a total of 314 dosages (California Healthline, 11/16).
Consumer advocates and health care economists say that Wal-Mart's program, and similar discount programs launched by other retailers including BJ's Wholesale Club and Target, might benefit some people without prescription drug coverage, but it will not have a significant impact on the retail drug industry because it excludes brand-name drugs and many generics.
According to IMS Health, only one of the 10 most-prescribed medications -- the antibiotic amoxicillin -- is available through the Wal-Mart program. Wal-Mart officials said that according to the Internet drug index RxList, the program provides discounts for four of the top 20 prescribed drugs.
Bill Simon, Wal-Mart executive vice president of professional services, said the volume of $4 generic drugs increased by an average of 60% over last year at stores that offer the discount, and 30% of all prescriptions filled at Wal-Mart are for the $4 generic drugs.
The National Community Pharmacists Association, a trade group for independent drugstores, said that Wal-Mart's list of discounted drugs is a "publicity stunt" designed to bolster store traffic.
Walgreen and CVS, the two largest drug store chains in the U.S., as well as local pharmacies, have said they will not match Wal-Mart's discount.
Harvard Business School health care economist Regina Herzlinger said she believes convenience of local and chain pharmacies, rather than Wal-Mart's discount program, will dictate where people fill their prescriptions (Boston Globe, 11/17).