Posted on 12/02/2006 10:47:22 AM PST by grundle
Wal-Mart boasts that its new $4 generic drug program is disrupting the market, attracting new customers to its stores and starting the nation on a road that will ultimately squeeze billions of dollars from prescription drug spending.
“I was never a customer of Wal-Mart,” said Frank Ganci, 74, a retired independent contractor who lives in Ridgefield, N.J. He has no drug insurance, despite being eligible for it under Medicare, because he considers the monthly premiums too high.
Mr. Ganci said he recently paid $12 for a month’s supply of three generic drugs at the Wal-Mart in Secaucus — atenolol for a leaky heart valve and two blood pressure drugs, hydrochlorothiazide and lisinopril.
His drugs had cost him $110 at his local pharmacy last month, he said. More than half of that was spent on a name-brand drug, which his doctor switched to generic atenolol so that he could buy it under the Wal-Mart program.
The $4 prescriptions have turned him into a Wal-Mart shopper, Mr. Ganci said. “If they don’t make up the money on prescriptions, they’re going to make it up on my clothes and food purchases.”
Wal-Mart said earlier this week that in nine other states — including California, Minnesota and Pennsylvania — it had taken 55 drugs off the $4 list and was charging $9 for them in deference to state regulations that prohibit pricing below cost if doing so could drive competing stores out of business.
“These states have low-cost laws, and we wanted to be in compliance,” said David Tovar, a Wal-Mart spokesman. While the laws vary, Mr. Tovar said, the $9 price seemed to comply with them all.
(Excerpt) Read more at nytimes.com ...
Interesting if indeed they have to back off so quickly in California.
State regulation at its best. That is if you believe in socialism.
Is it safe to assume that the States mentioned are Democrat run? What about Minnesota?
Certain generic drugs are priced higher in CA, CO, HI, MN, MT, PA, TN, WI, and WY due to state laws.
http://www.walmart.com/catalog/catalog.gsp?cat=546834&fromPageCatId=5431
Thanks for the link and complete list of states.
The big cos., Merck etc. make their $$ selling pills for 1¢ ea. or less, to the distributors. Catch? Ya gotta buy a boatload. The big mark-up comes at the Pharmacy. You won't hear the pols. utter a word about this.
Too funny. The government wants lower prescription drug prices so they're mandating higher prices. Eeeeeegsellent.
It'd be nice if the Wal-Mart stores in these states posted big signs at their pharmacies explaining why these states are forcing people to be ripped off.
Competition is a good thing.
but I thought we HAVE to socialize health care because of the unbearably high prices of prescription drugs!
Prescription drugs aren't all that expensive. Walmart proved that by ratcheting down the prices to $4. If only 55 of the 300+ drugs they had at $4 were below cost that means that Walmart is still turning a profit on the other 245+ drugs.
The problem isn't that Walmart is pricing them so low. The problem isn't supply and demand where people are willing to pay a markup like that (people will pay any $$ amount for things they truly need). The problem isn't the costs that the drug companies are charging (if they were charging high prices then Walmart couldn't turn a profit on 245+ drugs at $4.00 for 30 days).
No the problem is the stores themselves charging that extra profit on items people need, because people are willing to pay them.
Enter Walmart. Instead of playing the cut the price a dollar, wait till catch up, cut another dollar, rinse and repeat Walmart just went for the throat and said lets get it over with and dropped the price to $4.00 across the board. Easier to do it across the board then it is to take each drug and say "How much for this one? How about this one?"
So the other stores have a choice, call or fold. Target and someone else have called. That means they are turning a profit on at least some of the drugs as well in hopes of at least coming out a wash in the end.
The other stores have the same choice. Call or fold. That's competition. That's capitalism. Not dictating what stores can and cannot charge.
Ping
I agree. In fact, when I first read the article, I was hoping Wal Mart would place a full page ad in The New York Times explaining it.
There will always be competition. Wal Mart can't make Target disappear.
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