Wal-Mart's Low-Cost Generic Drug Program To Begin Nationwide Earlier Than Expected

Main Category: Pharma Industry / Biotech Industry
Also Included In: Public Health
Article Date: 10 Oct 2006 - 20:00 PDT


Wal-Mart Stores on Thursday announced that the statewide expansion of a pilot program in Florida under which some company pharmacies will sell 30-day prescriptions of some generic medications for $4 will occur on Friday, three months earlier than expected, the Orlando Sentinel reports (Chediak, Orlando Sentinel, 10/6). Last month, Wal-Mart announced that the program would initially include 65 Wal-Mart, Sam's Club and Neighborhood Market pharmacies in the Tampa, Fla., area and would expand statewide in early 2007 and possibly to other states in the future (Kaiser Daily Health Policy Report, 9/22). Wal-Mart officials said they decided to expand the program statewide early because of strong customer response (LaMendola, South Florida Sun-Sentinel, 10/6). Bill Simon, executive vice president of the Wal-Mart professional services division, said that customers filled 36,000 new prescriptions at company pharmacies in the Tampa area during the first 10 days of the program (Teitelbaum, CQ HealthBeat, 10/5). Simon added, "I would expect that we would be in most of the U.S." with the program this year. In addition to the statewide expansion, Wal-Mart announced that the number of generic medications included in the program will increase to 143 from about 125 and that the number of different dosages and forms of the treatments included will increase to 314 from 291 (Majors, AP/Arizona Daily Star, 10/6). "We will continue to look at opportunities to expand that list," Simon said (Orlando Sentinel, 10/6).

Reaction
Target on Thursday announced that company pharmacies in Florida will match Wal-Mart prices for generic medications (Reuters/New York Daily News, 10/6). However, Walgreen and CVS pharmacies in Florida will not match Wal-Mart prices for generic medications, the companies said (Orlando Sentinel, 10/6). Michael Polzin, a spokesperson for Walgreen, said that the Wal-Mart program "really isn't going to save much" for customers, adding that "we don't see it having a significant impact on our patients" (South Florida Sun-Sentinel, 10/6). Bruce Roberts, vice president and CEO of the National Community Pharmacists Association, said, "If you look at the list of medications they are offering for $4, it represents about 1% of the total number of drugs available." Roberts added, "The question people should be asking Wal-Mart is, 'What will you be charging for the other 99% of the medications that people need?'" (CQ HealthBeat, 10/5). Florida Gov. Jeb Bush (R) in a Wal-Mart press release said, "This program empowers our people to talk to their doctors about accessing these more affordable medications, which can lead to higher compliance rates and better health" (Roberts, Arkansas Democrat-Gazette, 10/6). Paul Doering, co-director of the Drug Information and Pharmacy Resource Center at the University of Florida, said, "I think it will be a great advantage for those who don't have a prescription plan, or (a) sub-optimal prescription plan" (Orlando Sentinel, 10/6). Gary Claxton, a vice president at the Kaiser Family Foundation and director of the Health Care Marketplace Project at the foundation, said, "Generics are not very expensive in the first place," adding, "It's a good thing to make generic drugs cheaper, but that isn't where most of the big costs are" (AP/Arizona Daily Star, 10/6).

Opinion Pieces
Several newspapers recently published editorials and an opinion piece on the Wal-Mart program. Summaries appear below.

• Charleston Gazette: The "spectacular announcement" by Wal-Mart and the subsequent announcement by Target might "curb the rapacious pharmaceutical industry so much that it can't give $10,000 yearly gifts to physicians to persuade them to prescribe high-priced brands," according to a Gazette editorial. "We hope the super-bargains reach West Virginia soon" and "all doctors, clinics and health insurance systems utilize generic drugs more than ever," the editorial states (Charleston Gazette, 9/27).
  
  
• David Harsanyi, Denver Post: "The truth is that in one stroke, Wal-Mart has done more for this nation -- and living standards -- than a thousand third-rate legislators ever could," columnist Harsanyi writes in a Post opinion piece. He adds, "This will, through the ensuing competition, almost certainly lower health care costs for everyone" (Harsanyi, Denver Post, 10/1).
  
  
• Des Moines Register: "Since the U.S. government has failed to put in place single-payer health insurance that would result in huge buying power and the ability to leverage down costs, maybe the best hope lies with Wal-Mart," a Register editorial states. "An added benefit to Wal-Mart's plan could be steering people toward generics, which are frequently as effective as more expensive brand-name drugs," the editorial states, adding, "Its pharmacy could become a destination for the poor, uninsured and even seniors who are getting drugs from Canada or have reached the 'donut hole' in their Medicare prescription plans" (Des Moines Register, 10/3).
  
  
• Hartford Courant: "The Wal-Mart experiment couldn't be better news for working people with chronic illnesses who are hurt by the high cost of medication for allergies, cholesterol, blood pressure, diabetes and even Parkinson's disease," according to a Courant editorial. The editorial adds, "Wal-Mart's size and clout make drug bargains possible, and its influence on the marketplace has already prompted some of its competitors to follow suit" (Hartford Courant, 9/29).
  
  
• Providence Journal: "Wal-Mart's plan ... is a positive step," but "it is unlikely to make a big difference to America's overall health care costs" and might not "even give Wal-Mart a big edge over traditional pharmacy chains," according to a Journal editorial. Prescription drugs account for only about 15% of the U.S. health care spending annually, and generic medications "are only a sliver of the total," the editorial states, adding that consumers with health insurance "will probably still base their purchases on the convenience of a store's location" (Providence Journal, 9/28).
  
  
• Tacoma News Tribune: "Critics have accused Wal-Mart of offering the low-cost drugs to help deflect criticism of its employee health care benefits," but, regardless of "Wal-Mart's motives, its $4 prescriptions will likely be a help to those Americans who need it most," according to a Tacoma News Tribune editorial. "At the very least, drug industry experts say, the Wal-Mart move will raise awareness among consumers of the price benefits of generics and generally lower prices for those off-brand drugs," the editorial states, adding, "At best, those lower prices would mean greater access to needed medications, which could improve the health of millions of Americans" (Tacoma News Tribune, 10/2).
  
  
• Winston-Salem Journal: "If the world's largest company can make money with responsible policies that contribute to the common good, that may prompt other companies to follow suit," and "a corporate competition to make money by doing good would benefit everyone," a Journal editorial states. The concern that the Wal-Mart program might "just be a frosting to improve image ... is immaterial," the editorial states, adding, "It is more important to see what impact the initiatives have" (Winston-Salem Journal, 9/27).

"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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