By Michael Bott
(U-WIRE) DAVIS, Calif. – Wal-Mart launched its $4 generic
prescription drug program in Florida last September, with the
intention of taking it nationwide in January 2007.
The program was more successful than first anticipated,
according to Wal-Mart spokesperson Jami Arms, and went national by
the end of November 2006.
However, while Wal-Mart claims that its intention is to bring
affordable prescription drugs to working-class families, skeptics
say otherwise.
Generic drugs are identical in composition to their name-brand
counterparts yet are more affordable, according to Dr. John Grubbs,
director of pharmacy for the University of California-Davis Health
System.
“The reason the price is so much less is primarily because the
name-brand manufacturer had to do all the clinical trials to get it
approved, so they have to recover their cost,” Grubbs said.
Wal-Mart offers 143 different generic drugs spanning categories
from allergy to seizure to anti-depressants for $4, according to a
list released by Wal-Mart. Drugs priced at $4 make up about 25
percent of sales in the company’s pharmacies.
“We just saw such a huge consumer demand for the product and we
wanted to offer it to as many people as possible, as soon as
possible,” Arms said. “This is Wal-Mart doing what it always does,
which is drive cost out of the industry.”
Some critics, such as Wake Up Wal-Mart, are skeptical that
Wal-Mart has the good of the working class in mind, equating the $4
generic-drug program to a publicity stunt.
“Cutting prescription-drug costs is obviously a good thing, but
to use it as a publicity stunt is completely disingenuous when you
fail to provide health care to half of your employees,” said Paul
Blank, campaign director for wakeupwalmart.com. “They were a little
misleading in how they announced the program as well. They say it
covered 300 prescription drugs when it only covered 140.”
One benefit of the program, according to Blank, is that after
Wal-Mart cut generic-drug prices, other large retailers such as
Target and Costco followed suit.
“We are proud to have introduced competition to an area where it
has been too scarce for too long,” said Wal-Mart President and CEO
Lee Scott in a Nov. 27 press release. “And, we hope others will
continue to join us in making prescription medicines more
affordable and accessible for all Americans.”
In fact, Wal-Mart is now selling many generic drugs at a
loss.
“In some cases, the $4 price can be pretty cheap,” Grubbs said.
“The price to dispense the drug is about $10. … They are
absolutely losing money on those sales.”
This causes people like Grubbs and Blank to wonder if Wal-Mart
is being honest about its motives. Both said they think Wal-Mart
introduced the program to increase foot traffic in stores and to
take attention off of the fact that it does not provide health care
for many employees.
Regardless of Wal-Mart’ s intentions, Grubbs said he believes
generic drugs will play an increasingly important role in lowering
prescription-drug costs and extending health care coverage to more
Americans.
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