Wal-Mart's $4 Generic Drugs Rollout Spreads, Threatening Competition

Strategic Insights -

Wal-Mart's aggressive rollout of generic drugs at $4 for a 30-day supply in 49 states, including Minnesota, is shaking the retail pharmacy market. The move, which could save consumers hundreds of dollars a month, has raised concerns from independent pharmacists who fear it may undermine the role of pharmacists in advising patients on medication. As of Monday, Wal-Mart's inexpensive generics are available at 3,810 pharmacies in 49 states, targeting the 14 most commonly prescribed medications in the country. Meanwhile, Target, Wal-Mart's archrival, has also jumped into the fray, announcing that all its 1,287 pharmacies would offer some generic drugs at the same price.

Key Takeaways:

  • Wal-Mart's $4 generic drug program is now available at 3,810 pharmacies in 49 states, including Minnesota, where 64 Wal-Mart stores are offering the service.
  • The program includes 14 of the 20 most commonly prescribed medications in the country, according to rxlist.com, a website that tracks information on prescription drugs.
  • Target, Wal-Mart's competitor, has also launched a $4 generic drug program, offering the service at its 1,287 pharmacies nationwide.
  • Independent pharmacists have expressed concerns that Wal-Mart's strategy may lead to patients buying prescription drugs without consulting pharmacists, potentially endangering their health.
  • Wal-Mart's move follows its initial launch of the program in Florida in late September, which has since expanded to 11 additional states, including Minnesota.
  • CVS Corp. and Walgreen Co., two of the nation's largest drugstore chains, claim they already price generic drugs competitively with Wal-Mart and see no need to respond to the discount retailer's move.
  • A senior vice president of the National Community Pharmacists Association expressed concerns that Wal-Mart's discounting strategy may treat prescription medicines as a "commodity," undermining the role of pharmacists in patients' care.

Statistics:

  • 3,810: Number of pharmacies in 49 states offering Wal-Mart's $4 generic drugs.
  • 14: Number of most commonly prescribed medications in the country available at the discounted price.
  • $4: Price of generic drugs for a 30-day supply at Wal-Mart pharmacies.
  • 1,287: Number of Target pharmacies offering the $4 generic drug program nationwide.
  • 11: Number of states, including Minnesota, in which Wal-Mart expanded its $4 generic drug program.
  • 95 percent: Percentage of Walgreens customers with prescription drug insurance and a co-pay not significantly higher than $4.

Sources:

  • "Wal-Mart Launches $4 Generic Prescription Drug Program" by Chris Serres (Star Tribune, October 2006)
  • www.rxlist.com (prescription drug information website)
  • Lee Scott, President and CEO of Wal-Mart (statement released Monday morning)
  • Michael Polzin, Spokesman for Walgreens (interview)
  • Robert Appel, Senior Vice President of Communications at the National Community Pharmacists Association (interview)