Wal-Mart announced yesterday that it is expanding the list of generic drugs that it sells for $4 for a one-month supply, and is creating a second tier of more expensive generics that it is selling for $9. This will mean that 361 products made up of 157 medial compounds are now covered by the program.
According to the statement released by the company, “Important prescription medicines have been added to the $4 program covering glaucoma, attention deficit disorder/attention deficit hyperactivity disorder (ADD/ADHD), fungal infections and acne. Fertility and prescription birth control will also be included at $9, compared to national average prices ranging from $24 to $30 per month and saving women an estimated $15 to $21 per month -- $180 to $250 annually.”
In addition, the company said, it will be moving newly released generic drugs to the $4 list more quickly.
Wal-Mart prescription savings program has saved consumers more than $600 million during its first year of operation, according to figures released by the company. In addition, Wal-Mart says that generics covered under the program have accounted for 40 percent of all prescriptions filled at its pharmacies since the program began.
The New York Times notes in its analysis of the announcement that it “may give a glimpse of the future at Wal-Mart pharmacies. The company seems to be reaching out to a younger and broader drug clientele as it tries to expand its piece of the nation’s $250 billion retail pharmaceutical market beyond its current share of 5 to 6 percent.
“Many of the drugs previously on the Wal-Mart plan were heart, high blood pressure and diabetes drugs commonly used by older people. But yesterday, the company added to its $4 list methylphenidate, a drug for attention deficit and hyperactivity disorder that is commonly used for school-age children.
“Perhaps more significant, Wal-Mart said it would start selling generic versions of two popular birth control pills for $9 a month, appealing to an estimated 11 million women in America, most of them under age 40, who use oral contraceptives.”
According to the statement released by the company, “Important prescription medicines have been added to the $4 program covering glaucoma, attention deficit disorder/attention deficit hyperactivity disorder (ADD/ADHD), fungal infections and acne. Fertility and prescription birth control will also be included at $9, compared to national average prices ranging from $24 to $30 per month and saving women an estimated $15 to $21 per month -- $180 to $250 annually.”
In addition, the company said, it will be moving newly released generic drugs to the $4 list more quickly.
Wal-Mart prescription savings program has saved consumers more than $600 million during its first year of operation, according to figures released by the company. In addition, Wal-Mart says that generics covered under the program have accounted for 40 percent of all prescriptions filled at its pharmacies since the program began.
The New York Times notes in its analysis of the announcement that it “may give a glimpse of the future at Wal-Mart pharmacies. The company seems to be reaching out to a younger and broader drug clientele as it tries to expand its piece of the nation’s $250 billion retail pharmaceutical market beyond its current share of 5 to 6 percent.
“Many of the drugs previously on the Wal-Mart plan were heart, high blood pressure and diabetes drugs commonly used by older people. But yesterday, the company added to its $4 list methylphenidate, a drug for attention deficit and hyperactivity disorder that is commonly used for school-age children.
“Perhaps more significant, Wal-Mart said it would start selling generic versions of two popular birth control pills for $9 a month, appealing to an estimated 11 million women in America, most of them under age 40, who use oral contraceptives.”
- KC's View:
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This is an area in which Wal-Mart really has set the agenda, with other companies seeming to follow its lead, and it is this kind of expansion – especially as it appeals to a demographic that may not find it an appealing place to shop – that could make the long-term difference for the company.
It seems to me that Wal-Mart has gotten itself into trouble when it has tried to reinvent itself for new markets, such as urban areas, that don't connect with the company’s vision. But in doing things like its prescription initiative, the company plays to its sweet spot – low prices – and expands its appeal in an entirely organic way. I’m guessing that this is the kind of program for which a lot of people might change their shopping habits, because it adds up to real savings in a very short time.
Not only that, but it may have real impact on the health care system in this country. The Times notes that “government economists recently credited the discount pricing plans with contributing to a slowdown of inflation in the Consumer Price Index for prescription drugs, which is currently running at about 1 percent, a three-decade low.” That’s impressive. Imagine what it could mean if its in-store health clinics have the same kind of impact.
