Wal-Mart to sell many generic drugs for $4 each

? Retailing giant Wal-Mart Stores Inc., known for forcing prices down to dominate nearly every market it enters, said Thursday that it would sell nearly 300 generic drugs for $4 per prescription, whether or not a customer has insurance.

By using its might as the nation’s largest retailer and its ability to force suppliers to cut prices to the bone, the company will begin the $4 price program in its 65 stores in the Tampa area today, in all of Florida in January, and in as many other states as possible by the end of 2007. The $4 is for a typical monthly supply of medicine, and included on the Wal-Mart list are generic versions of many popular prescription drugs, including the antibiotic amoxicillin and the heart and blood-pressure treatment lisinopril, sold under the brand names Prinivil and Zestril.

Health care industry analysts said the program has the potential to transform the $230 billion prescription drug business the way Wal-Mart has transformed other industries, including groceries and toys, where its aggressive pricing has forced some competitors out of business and allowed it to dominate entire categories of merchandise.

Nicole Marmon, a pharmacy technician, fills a prescription Thursday at Medicine Man Pharmacy in Coeur d'Alene, Idaho. Wal-Mart plans to begin selling nearly 300 generic prescription drugs for a sharply reduced price in Florida, offering a big lure for bargain-seeking customers and presenting a challenge to competing pharmacy chains.

Health care costs rose an average of 9.6 percent a year from 2000 to 2004, and a large component of the increase was the price of drugs, which rose an average of 11.4 percent a year in that time. Inflation during that period was about 2.6 percent a year. Though the increase in drug prices has been slowing in recent years, largely because of the wider use of generics, it has still outpaced inflation, health care analysts and industry trade groups say.

Wal-Mart executives, criticized by labor unions and consumer groups that say the company shortchanges its employees on pay and health care, said they started the program to help families and retirees, especially those on Medicare. They said at news conferences and in telephone calls Thursday that they see these groups struggling daily at the company’s pharmacies to pay for medicine.

“This $4 program represents real savings for working families,” said William Simon, executive vice president for professional services at Wal-Mart. “Wal-Mart’s taking this step so that our customers and associates can get the medicines they need at prices they can afford. … Customers tell us all the time that prescription drug costs are forcing them to make tough decisions.”

For sale for $4

The top-selling generic drugs Wal-Mart will offer for $4:
¢ Amoxicillin: antibiotic
¢ Lisinopril: controls blood pressure and treats heart failure
¢ Hydrochlorothiazide: diuretic
¢ Atenolol: treats chest pain and controls blood pressure.
¢ Furosemide: diuretic

Generic drugs have the same active ingredients as their brand name counterparts but are much cheaper. Last year, generic drugs accounted for 56 percent of all prescriptions filled in the United States but only about 10 percent of total prescription drug sales.

Wal-Mart spokesman David Tovar said the company will make money on the sales but will not disclose whether it negotiated with drug makers, wholesale suppliers or both to make the deal profitable. “It is not a loss leader. It is something we intend to make a profit on,” he said. “The way we do that is through our logistics and our technology.”

Some top-selling generics are not on the list of drugs Wal-Mart will offer for $4, including the painkiller hydrocodone – whose trade name is Vicodin – and generic forms of the painkiller Darvon and the anti-anxiety drug Xanax.