Competitors: Wal-Mart Rx plan a stunt

By Sarah Skidmore Associated Press Writer
Friday, October 20, 2006 | No comments posted.

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WOODBURN - Wayne Lewis, 63, found a surprising deal at Wal-Mart on Thursday.

He and his wife pay $10 for generic prescriptions, which adds up to about $300 a month in insurance co-payments. But while shopping for a dog collar at the Wal-Mart in Woodburn, the Zigzag couple learned they can get some of those prescriptions filled for $4 each.

“Four dollars is a lot better than $10 dollars,” Lewis said.

Wal-Mart Stores Inc. expanded its low-cost generic drug program to Oregon and 13 other states on Thursday. The mega-retailer, which launched the program in Florida two weeks ago, allows anyone with a prescription to get a 30-day supply of an approved generic drug for $4, regardless of insurance coverage.

The Wal-Mart program covers 143 drugs in 314 prescriptions dosages and forms. The company said the available drugs represent about 25 percent of the prescriptions filled at its stores nationwide.

“We are trying to bring real solutions to a real problem that affects real people,” Wal-Mart spokesman Eric Berger said at a Woodburn store Thursday.

But analysts said the main benefit for Wal-Mart is in drawing more shoppers into its stores who may come for prescriptions and then stay to buy in other departments.

“It must be working for them. They must be seeing a benefit if they're expanding this rapidly,” said Richard D. Hastings, senior retail analyst with Bernard Sands LLC.

The impact of the low-cost program on Oregonians is unclear.

Wal-Mart did not disclose the average savings on the drugs within the state, where it has 29 stores and one distribution center in Oregon.

“Any cost savings to uninsured is always a good thing,” said Dr. Jeanene Smith, deputy administrator for the Office for Oregon Health Policy and Research.

But health experts said generic drugs represent only a fraction of the costs consumers face.

The Oregon Health Plan could potentially save money with the availability of the program, said Lynn Read, deputy administrator for Oregon's Medical Assistance Program. But she said the savings depend primarily on whether patients use Wal-Mart as their pharmacy or are using the drugs on the list.

Critics of the Wal-Mart program, including rival non-chain pharmacies, said it covers only a fraction of a prescription drug market that includes about 8,700 generics approved by the FDA.

“This is a public relations stunt meant to drive foot traffic. Most people will find their prescriptions do not fall under the $4 plan,” said Charlie Sewell, senior vice president of government affairs at the National Community Pharmacists Association.

Target Corp., the no. 2 discounter behind Wal-Mart, said it will match the discount in all the same states except Alaska and Vermont, where it does not have stores.

Other chains said they would not change prices that they contend are already competitive, especially for people with insurance who only foot the cost of a copay.

“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,” Deerfield, Ill.-based Walgreen Co., the nation's largest drugstore chain by sales, said in a statement.

Kmart, which is part of Sears Holding Corp., noted that it started offering 184 generic prescriptions in May in all its 1,100 pharmacies nationwide for $15 for a 90-day supply and would stand by that program.

The Wal-Mart program expansion is the latest health care initiative by the company since late last year, when the nation's largest private employer sought to deflect union-backed criticism of its worker benefits.

Union-backed WakeUpWalMart.com said Wal-Mart was just trying to deflect attention from criticism that it provides skimpy health care plans for its more than 1.3 million U.S. employees.

“Wal-Mart must address its own health care crisis, because the fact is all the low priced drugs in the world wont help the 775,000 Wal-Mart workers and families that are left cruelly uninsured,” WakeUpWalMart spokesman Chris Kofinis said.

Besides Oregon, Wal-Mart's program was extended Thursday to the following states: Alaska, Arkansas, Arizona, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Texas and Vermont.

Wal-Mart will continue to expand into other states “as quickly as possible,” although regulatory and legal hurdles my slow then move in some states.

Wal-Mart shares rose 8 cents to $48.42 in afternoon trading on the New York Stock Exchange.
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