Prescription drugs-FYI

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Competitors Match Wal-Mart Drug Price

Source: The Daily Oklahoman

Publication date: 2006-09-23

Sep. 23--One day after Wal-Mart announced discounted pricing for generic

prescription drugs, its competition reacted by matching the $4 price or

dismissing it as insignificant.

But a spokesman for the Oklahoma AARP described the move by Wal-Mart to sell a

30-day supply of 291 prescription drugs as a significant change for consumers.

" AARP is encouraged that retailers are looking for some creative ways to make

prescription drugs more affordable and encouraging use of generics, " said

Burley, associate state director for the Oklahoma AARP. " This will be welcome

news for some folks. "

Wal-Mart said it would roll out the new pricing plan in a limited launch Friday

in the Tampa, Fla., area. A company spokesman said it would expand the program

to the rest of Florida in January and then take it to " as many states as

possible " during the remainder of 2007.

Wal-Mart said the $4 drug plan would save consumers up to 70 percent for some

generic drugs, although a comparison of prices with Drugstore.com revealed that

some generics in much larger quantities were priced lower on the online discount

pharmacy.

For example, Drugstore.com said it will sell 180 tablets of a widely used blood

pressure medicine, atenolol, for $16.99. Six 30-day supplies of atenolol at

Wal-Mart's $4 price would cost $24.

Target Corp. posted a news release on its Web site that said it will match

Wal-Mart's lower prices in the Tampa, Fla., area beginning immediately.

" Target remains committed to providing guests added value and quality service as

part of its 'Export More, Pay Less.' brand promise, " the company said on its Web

site.

Target operates eight stores in Oklahoma, including four in the Oklahoma City

area, according to its Web site.

A spokeswoman for Walgreens, one of the nation's largest pharmacy retailers with

5,401 stores, said it has no plans to match the Wal-Mart discounts.

Wal-Mart's discounted pricing plan covers only a fraction of the more than 1,800

generic drugs available to consumers, Walgreens spokeswoman Bruce said.

" We doubt this will have a significant impact on patient behavior, " Bruce said.

" Our convenient services and all of our highly convenient locations have proven

to be a bigger deciding factor over the years in people choosing to use

Walgreens, " Bruce said.

Another factor in Walgreens' decision to not match the discounts: almost all of

its pharmacy customers are covered by insurance programs, which provide

discounts from the retail price, she said.

" The average co-pay for the generics on Wal-Mart's list is just over $5, " Bruce

said. " About $1 is not enough of a difference to make most people to stop using

their preferred pharmacy. "

Walgreens operates 75 stores in Oklahoma, according to the company's Web site.

Competitor CVS/pharmacy issued a statement on its Web site that also dismissed

the Wal-Mart pricing plan as insignificant to its customers because of the

limited number of generics included.

" Cash sales of these products amount to less than one-half of one percent of our

total pharmacy sales, " said Matt Leonard, senior vice president of pharmacy at

the drug chain. " For customers who have prescription coverage, the average

generic co-pay is relatively nominal.

" Furthermore, under many health plans, the price paid by the consumer for some

of these drugs is actually less than $4. "

CVS/pharmacy operates 27 stores in Oklahoma, according to its Web site.

Another national chain that fell in line with the Wal-Mart plan was Kmart, which

issued a news release highlighting its own program that it said was implemented

in May. Kmart will provide a 90-day supply of certain generic drugs for $15, the

company said.

" While Wal-Mart's program appears to be a cost-saver at first glance, Kmart's

90-day program is a better value and time saver for customers, allowing them to

return to the store every three months instead of every 30 days to refill their

prescriptions, " said Mark Doerr, vice president, Kmart Pharmacy.

Kmart operates seven stores in Oklahoma, but none in the Oklahoma City area,

according to its Web site.

Meanwhile, Consumers Union, the nonprofit organization that publishes Consumer

Reports magazine, said the Wal-Mart discount plan could spark something of a

price war for generic drugs that would benefit consumers.

" This decision by Wal-Mart hopefully will encourage more competition in the drug

marketplace that will lead to lower drug prices overall, " said Gail Shearer,

health policy director for Consumers Union. " Generic drugs are a vital piece in

the puzzle to bring down health care costs. They are just as effective and safe

as most high-priced, heavily advertised drugs. "

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Copyright © 2006, The Daily Oklahoman

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