Released: September 22, 2006

Wal-Mart’s $4 generic prescription drugs

Source: By Kathleen Day, Washington Post (Free Registration)

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

Using its might as the nation’s largest retailer and its legendary 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.

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 around 2.6 percent a year.

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