Wal-mart made big news today in announcing a local test of charging $4 for certain generic drugs. The test is being conducted at Tampa, FL Wal-marts. The program will expand throughout Florida in Janaury, and the plan is to roll out nationally next year.
The program is limited to approximately 291 generics (see bottom of the link above). Key components of the program include:
– The $4 pricing will be available to all pharmacy customers with a prescription from a doctor that can be filled with a covered generic medicine.
– This program will be available to the uninsured.
– Insurance will be accepted.
– The program presently covers 291 generic medications from many of the most common therapeutic categories.
– The medicines represented are used to treat and manage conditions including allergies, cholesterol, high blood pressure and diabetes. Some antibiotics, antidepressants, antipsychotics and prescription vitamins are also included.
– The program will be available statewide in Florida in January 2007.
– Wal-Mart intends to take the program to as many states as possible next year.
The New York Times reported the story this morning prior to the press conference. The article wondered whether Wal-Mart was using this program as a loss leader or they had used their market power to gain lower pricing. In my view, this is a combination of a loss leader to bring people in not only for non-discounted prescriptions, but for assistive devices such as wheelchairs, and potentially other devices as they come on the market. Wal-Mart is also battling it’s track record of paying poorly, using part time staff to avoid paying their meager benefits, a memo to the board of directors from the top exec for benefits outlining a plan to limit the employment of those who are more likely to use health benefits (a memo that also exposed what routine cost containment measure they weren’t doing) and the poorly designed health insurance available to some employees.
Well, it is interesting. What a business.