NEWS - Wal-Mart to offer $4 prescriptions in Florida

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Wal-Mart to offer $4 prescriptions

Chicago Sun-Times

September 22, 2006

Wal-Mart plans to begin selling nearly 300 generic prescription drugs for a

sharply reduced price, offering a big lure for bargain-seeking customers and

presenting a challenge to competing pharmacy chains.

The world's biggest retailer said that beginning today it will test its

sales program, in which 291 generic drugs will be sold at $4 for a month's

supply, in Florida. The drugs involved provide treatments for conditions

ranging from allergies to high-blood pressure.

A spokesman for Deerfield-based Walgreen Co. said the drugstore chain

expects no significant impact, largely because its shoppers are more likely

to carry insurance.

" Nearly 95 percent of our [Walgreens] pharmacy patients have insurance

coverage. They are only responsible for the co-pay. The average co-pay we

receive from patients is about $8, and in a lot of cases, less than that, "

said Walgreen Co. spokesman Polzin.

" The uninsured are more sensitive to prices, but they still need a pharmacy

that's convenient and open when they need it to be, " Polzin said.

Nevertheless, Walgreen's stock fell 7.35 percent, closing at $46.28, after

Wal-Mart's announcement Thursday morning. CVS' share price fell 8.35

percent, to $32.47.

Generics account for about 60 percent of Walgreen's drug sales. However,

Wal-Mart's number of cut-rate medications is small compared with the 1,800

generic drugs that Walgreens stores stock, Polzin said.

Bentonville, Ark.-based Wal-Mart is expanding in the drugstore industry as

it did with toy stores and grocers in the past decade. The company's success

as a toy retailer led to the acquisition of Toys R Us Inc. by a group of

buyout firms.

''It's going to change the landscape,'' said , a money

manager at Wentworth, Hauser & Violich. Pharmacies ''will lose the margin

they've got on those drugs,'' she said.

Profit margins for drugstores average between 10 percent and 15 percent for

brand-name drugs and 30 percent to 40 percent for generics, analysts

estimate.

Wal-Mart Stores Inc. officials said the reduced price represents a savings

to the customer of up to 70 percent on some drugs. The average monthly cost

for a generic drug prescription is $28.74, according to the National

Association of Chain Drug Stores.

Drawing customers to its pharmacies may help Wal-Mart boost sales of other

products as people wait for prescriptions to be filled. The company is also

adding 50 medical offices to its stores where shoppers can get treatment for

everyday ailments.

Most commonly prescribed

Wal-Mart will start offering the new prices at 65 stores in Tampa, Fla.,

then expand to the rest of the state by January.

The drugs in the program account for 20 percent of the prescriptions

Wal-Mart sells, Bill Simon, executive vice president of the company's

professional services division, said. They include ''the most commonly

prescribed drugs for some of the most common illnesses that face Americans

today, including cardiac disease, asthma, diabetes, glaucoma, Parkinson's

[disease] and thyroid conditions,'' Simon said.

Could ease criticism

Selling more affordable prescription drugs may also help Wal-Mart parry

criticism of its own workers' health benefits, said. Unions and

politicians have said the company's health plans are too costly for

employees.

The new prices may win over some shoppers who had been critical of Wal-Mart,

said, and ease disapproval as the company opens more stores in urban

areas, such as the Austin neighborhood, where the first Wal-Mart in Chicago

opens Wednesday.

''All of a sudden Wal-Mart's not the same bogeyman it was three weeks ago,''

she said.

Contributing: Business Reporter Guy

Bloomberg News, AP

http://www.suntimes.com/output/news/cst-nws-walmart22.html

Not an MD

I'll tell you where to go!

Mayo Clinic in Rochester

http://www.mayoclinic.org/rochester

s Hopkins Medicine

http://www.hopkinsmedicine.org