Wal-Mart $4 generic drug program

05 May: Wal-Mart to PBMs: You’re going down!

As readers of this blog know, we’ve been following the battle between Wal-Mart and pharmacy benefit managers (PBMs) with interest over the past couple of months. To me, it’s a superb business story that just isn’t getting the coverage it deserves. Already, we’ve seen lots of intrigue and strategy on display; it’s like a great chess match. Not only that, but all of those who receive prescription drug benefits through their employers will be affected by the outcome of this fight. Here’s a quick overview of what’s happened so far: 1. Wal-Mart introduced its $4 generic drug program and has hyped it heavily, increasing the retailer’s power to influence the retail drug market. 2. PBMs like Express Scripts and MedCo…

12 Mar: Will Rite Aid go the way of the dinosaur?

Rite Aid is a $24 billion company operating more than 5,000 drugstores in 31 states, making it the third-largest pharmacy chain in the United States. But unless this overpriced retailer receives some bailout money from heaven (’cause it’s sure not coming from Washington), the year 2009 may be its last. Motley Fool has just put it on its list of 15 companies that might not survive the year. Says the Fool: Rite Aid. (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%). This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain…

20 Jan: Can chain drugstores help North Dakota’s prescription drug prices?

A North Dakota news site reports that drug prices are under the microscope in the state as legislators consider repealing a law that prevents most chain pharmacies from competing there. The law requires pharmacies to be majority-owned by North Dakota licensed pharmacists. Supporters of repeal argue that allowing the big retailers to offer prescription drugs will encourage price competition and result in lower costs for consumers. To test this, The Forum of Fargo-Moorhead “took the five most common prescription drugs in North Dakota and compared their prices at four area pharmacies — two in North Dakota and two in Minnesota.” The results showed that North Dakotans weren’t paying more for these drugs than Minnesotans, after all. However, there was something…

02 Nov: CVS drug prices takes on Wal-Mart’s generic drug prices

  As Wal-Mart has taken the lead in lowering prices on generic drugs among brick-and-mortar retailers, the major drug chains have been slow to respond. Walgreens came around first, and now CVS has finally responded — with a $9.99 price point on a 90-day supply of about 400 different medications starting later this month. Despite the fact that CVS is a day late and dollar short on reducing prices on generics, its announcement got some surprisingly high-profile media coverage from the likes of the Dallas Morning News and the Los Angeles Times. Why, you might wonder? Because of an added gimmick that won’t do much for healthcare consumers — but that has obviously been good for PR. The gimmick? To…

27 Oct: Study: Prescription drugs cost more in poor neighborhoods

  One of the biggest advantages of shopping for prescription drugs online is price transparency, which empowers the consumer to easily find the best price among available options. As healthcare consumers well know, it is very difficult to comparison shop among brick-and-mortar pharmacies, because pharmacies typically don’t advertise their prices for prescription drugs (with the exception of the Wal-Mart generic drug program and similar programs, which generally include a list of covered drugs on the retailer’s Web site.) Because it’s difficult to compare prices, particularly for expensive, brand-name drugs, most consumers buy at their corner drugstore, assuming the price isn’t much different from the next corner — or the other side of town. This simply isn’t the case. What’s worse,…

03 Oct: The Wal-Mart effect

Even though pharmacy giants like CVS and Walgreens have denied that Wal-Mart’s $4 drug plan has affected sales, Walgreens stock has slumped by 15 percent, and the chain has announced lower-than-expected third quarter earnings. According to Peter Rost at Brandweek NRX, weaker margins on generic drugs were the reason for the slump. Peter also says that Wal-Mart has “just started wreaking havoc in the drug market. Target and others followed. Nothing will be the same. Watch as the old stalwarts try to keep prices high, until they finally bite the dust.” Wal-Mart said Sept. 27 it would increase the number of generic medications covered by its plan to 361.