Wal-Mart Announces Major Generic Drug Savings (Update: Target Matches!)
I’m not creative enough to come up with an objection to this — But I’m sure Wal-Mart’s critics will find something not to like about this:
Wal-Mart announced today that it will start a test program in Florida, where it will sell generic prescription drugs for $4 for a 30-day supply. The test will start tomorrow in 65 Tampa Bay-area stores and is to expand to the whole state by January.
In a statement, CEO Lee Scott says the world’s largest retailer intends to “take the program to as many states as possible next year.”
On average, generic drugs tend to cost between $10 and $30 for a month-long supply.
The world’s biggest retailer said that it will test the program in Florida that will make 291 generic drugs available, which are used to treat a variety of condition from allergies to high-blood pressure. It will also be available to the uninsured.
The program will be launched on Friday at 65 Wal-Mart, Neighborhood Market and Sams’ Club pharmacies in the Tampa Bay area in Florida and will be expanded to the entire state in January.
The company said it plans to take the program to as many states as possible next year.
“Each day in our pharmacies we see customers struggle with the cost of prescription drugs,” said Wal-Mart CEO H. Lee Scott, Jr., in a statement. “By cutting the cost of many generics to $4, we are helping to ensure that our customers and associates get the medicines they need at a price they can afford.”
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UPDATE: “Is this a great country or what?” Department — Target announced Thursday evening that they will match Wal-Mart’s generic drug price reductions in the Tampa Bay, effective immediately.
You aren’t creative enough, but I’m sure the shareholders of the generic drug companies can come up with some good reasons.
Comment by Kevin Irwin — September 22, 2006 @ 8:45 am
#1, Good point. WM must have had “discussions” with them before the announcement, as in “Let’s discuss what you’re going to do for us.”
Comment by TBlumer — September 22, 2006 @ 11:08 am
The WMT announcment came much to the chagrin of these shareholders as evident by the market reaction.
Comment by Kevin Irwin — September 22, 2006 @ 1:25 pm
#3, Not really. TGT is up a shade as of about 2:10, and WMT is down by less than the S&P is down.
Comment by TBlumer — September 22, 2006 @ 2:30 pm
Read the comment again. The shareholders I speak of are those who hold shares of Teva (TEVA), Watson(WPI), et al.
Comment by Kevin Irwin — September 22, 2006 @ 8:37 pm
#5, that was pretty weak on my part. Sorry.
Quick reax: Yes, several of the generics went down yesterday by 3%-5%, roughly. But there is a Dow Jones report I read at nasdaq.com that claims they will not be hurt. Of course, that is very easy for someone else to say. (I would link, but the blog is doing screwing things to apostrophes and quote marks in comments, even in links.)
Comment by TBlumer — September 22, 2006 @ 9:12 pm
Yeah, I don’t trust that report. If Wal-Mart and Target become big providers of generic drugs, they will draw market share away from CVS and Caremark. The bulk discounts that the big boxes command will undoubtedly shrink the profit margins of the generic drug companies.
Comment by Kevin Irwin — September 22, 2006 @ 11:16 pm