Wal-Mart won’t solve the prescription drug crisis

A lot of attention has been given to Wal-Mart’s decision to cut the price of a small number of generic drugs. The move has inspired many commentators to suggest there is no longer a prescription drug crisis; as Right Voices summarizes this opinion:

Let the private sector take care of the problem … retailers will compete to get the customer in the door.

If only it were that simple. The reality is that Wal-Mart’s price cuts are more a PR move than a significant improvement for Americans without prescription drug coverage. As the Kaiser Family Foundation explains:

Consumer advocates and health care economists say that Wal-Mart’s program, and similar discount programs launched by other retailers including BJ’s Wholesale Club and Target, might benefit some people without prescription drug coverage, but it will not have a significant impact on the retail drug industry because it excludes brand-name drugs and many generics. According to IMS Health, only one of the 10 most prescribed medications — the antibiotic amoxicillin — is available through the Wal-Mart program.

Kaiser further reports:

The National Community Pharmacists Association, a trade group for independent drugstores, said that Wal-Mart’s list of discounted drugs is a “publicity stunt” designed to bolster store traffic.

Neither Wal-Mart nor any retailer has the purchasing power to force the pharmaceutical industry to lower its prices. The system can only be corrected by correcting the forces that corrupted the system — and those reside in the public sector.

Enabling Medicare to negotiate prices with drug companies would be a good start, but only a start. The Gregarious Blog offers some other interesting ideas.

Whatever the policy solution, one thing’s for sure: it’s not Wal-Mart.

Comments (2)

Negotiating with drug companies is exactly the wrong thing to do. It uses coercive force against a legitimate industry. Furthermore, it might very well cause even higher drug prices in the end.

There’s a good, thorough, article by a well-respected economist available at MedsAbroad: Pelosi on Drugs.


It’s not a perfect solution, but it’s a start. One thing’s for sure: the current system is broken.

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