Wal-Mart's $4 drug plan far from 'generic'

Wal-Mart Stores president and c.e.o. H. Lee Scott calls it "one of the coolest things we've done in a long time." Customers seem to agree. The retailer's $4 drug program, which covers prescriptions for 314 commonly prescribed generic drugs for up to 30 days, has been expanded at a feverish pace since it was first tested in the Tampa Bay, Fla. market in September.

"Our team allowed us to take the first-mover position on this," Lee said of the program during a recent talk to analysts and investors. "So we're first in the customers' minds, but we're also first in the minds of politicians and other people who we're trying to influence to allow us to continue to grow."

Just two weeks after rolling out the low-cost program in all of its Florida stores, Wal-Mart expanded the program to 14 more states, based on customer demand. Those states are Alaska, Arizona, Arkansas, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas, and Vermont.

While Wal-Mart was clearly the first mover, other retailers are jumping on board. One of Wal-Mart's biggest competitors, Minneapolis-based Target, said it will match the discount in all of the same states except Alaska and Vermont, where it doesn't have stores. Likewise Natick, Mass.-based BJ's Wholesale Club pharmacies are now offering $4 prescriptions for 30-day supplies of select generic drugs.

"I think we're at the start of a trend to come up with ways of making health care more affordable to the public," BJ's v.p. of pharmacy operations Chris Cella told the Cherry Hill, N.J. Courier-Post. "It's making everybody think outside the box."

The company has instituted the program at its locations in New York, Delaware, Florida, and New Jersey. Despite the fact that BJ's is a membership-based business, shoppers don't have to be members to use its full-service pharmacies.

In the traditional grocery industry, several retailers are moving to match or closely meet Wal-Mart's program.

Price Chopper in the Kansas City market responded by saying it would offer more than 300 generic prescriptions at $4 each at 29 store pharmacies in the Kansas City area, plus two in Topeka, Kan. and two in St. Joseph, Mo. Most Price Chopper stores are owned by several area families, but all are affiliated with Associated Wholesale Grocers Inc., a food distributor based in Kansas City, Kan.

Cincinnati-based Kroger's Kansas City-area Dillons stores will also match the $4 deals from Wal-Mart and Price Chopper, and match similar promotions from others.

San Antonio, Texas-based H.E. Butt Grocery Co. has rolled out a new initiative via a loyalty card program in which customers can sign up for the "My HEB Pharmacy Rewards" card and get access to 500 generic drugs for $5 in all HEB pharmacies, plus savings on all other brand and generic drugs. The drugs being offered at the $5 price are those that address the most prevalent medical conditions in Texas, such as diabetes, hypertension, and heart disease. Customers who sign up for the card will enjoy savings of up to 50 percent on all brand and generic prescription drugs, as well as savings and special offers throughout the entire store. RX Rewards members will also enjoy priority scheduling for HEB Pharmacy services and access to free health screenings and educational information via mail and e-mail.

Other retailers are reacting by offering free prescriptions for certain medications. All 176 of the in-store pharmacies operated by Grand Rapids, Mich.-based Meijer, Inc. have begun offering free prescriptions for seven generic oral antibiotics. The antibiotics covered—Amoxicillin, Cephalexin, SMZ-TMP, Ciprofloxacin, Penicillin VK, Ampicillin, and Erythrimycin—account for about 70 percent of the generic antibiotic prescriptions that Meijer fills for children, the chain says.

Giant Eagle, based in Pittsburgh, is now offering customers prescriptions for the generic versions of the same seven antibiotics at no cost, along with four cough-and-cold treatments, Entex LA, Robitussin AC, Histussin, and Phenergan.

Other chains respond

Under Rochester, N.Y.-based Wegmans' new generic prescription drug program, shoppers can buy a 90-day supply of prescription drugs for $11.99, choosing from a list of almost 200 maintenance drugs, including multiple strengths.

Wegmans' program differs from those of other retailers in its focus on maintenance drugs.

However, at least one retailer responded that it won't change its drug prices. Walgreens, the nation's largest drug store chain, issued a statement that said, "Wal-Mart's limited price promotion is in response to the increasing number of seniors choosing Walgreens for their pharmacy needs. Therefore, Walgreens will not match Wal-Mart's promotion."

Kmart, which is part of Hoffman Estates, Ill.-based Sears Holding, said it would continue a program it launched in May, in which customers can fill 184 generic prescriptions in all of its 1,100 pharmacies nationwide for $15 for a 90-day supply.

Wal-Mart says it will continue to expand into other states "as quickly as possible," although regulatory and legal hurdles could come into play. Wal-Mart estimates that the list of $4 prescription medications represents nearly 30 percent of prescriptions that it currently dispenses in its pharmacies nationwide.

The retailer is using the same suppliers as before the launch of the $4 generic prescription program.

Convenience may matter more than health for U.S. eaters

Although healthy eating is a current hot topic, Americans think of convenience before health when considering what to eat, says consumer trends watcher NPD Group in its latest Eating Patterns in America report.

Port Washington, N.Y.-based NPD says the tradeoff of healthy choices for convenient alternatives is driving meal decisions. For example, Americans are eating sandwiches for dinner at home more than any other entree. They're using fewer fresh foods in meals served at home. And after years of bringing more dinners home from restaurants, Americans are now also bringing home more lunches from eateries.

"The driving force in our eating habits has always been convenience," observes Harry Balzer, NPD Group v.p. and author of the annual report. "The only surprise is how that will manifest in our behavior."

While 92 percent of Americans said they believe it's important for food to be fresh when they purchase it, fresh foods as components of meals eaten at home are declining. Last year almost half, or 47 percent, of in-home main meals included at least one fresh product, down from 56 percent in 1985.

"It's a huge hassle for us to shop, keep, use, and clean up fresh foods," notes Balzer. "It's no surprise to me that there is growing interest around the country in meal assembly centers. The real advantage of these places is that they do all the purchasing, storing, planning, preparing, and clean up of fresh foods."

Sandwiches are now the No. 1 dinner entree eaten at home, NPD found. Just over one out of every nine such dinners, or 11.1 percent, feature a sandwich. The lunchtime sandwich, however, appears to be on the wane: Last year 36 percent of all lunches served at home included a sandwich, representative of a slow decline from the peak year of 1990, when 45 percent of all at-home lunches featured a sandwich.

Increasing numbers of Americans are taking home lunches from restaurants. Sixteen years ago the average American brought eight restaurant meals home for lunch annually. Last year, that practice hit an all-time high of 13 restaurant meals, a 62 percent increase from 1990.

As for healthier eating, "[It] will take hold when it is either easier or cheaper to do than what we do now," adds Balzer.

Eating Patterns in America compiles data from more than 40 research efforts conducted by NPD, gathering information from consumers, manufacturers, and retailers. The report is based on data collected during the 12 months ending February 2006, although some exceptions apply.