BIG-BOX STORES OFFER $4 GENERICS

Wal-Mart, the world's largest retailer, started selling certain generic drugs for $4 per prescription in Florida in September. Since then, Wal-Mart has brought the plan to 37 states and plans to extend it as fast as it can. The $4 generic prescriptions are causing a ripple effect in the big-box retail industry, spawning imitators like BJ's Wholesale Club , but drawing criticism that say the discounts will not result in significant savings for most consumers.

Wal-Mart and BJ's, based in Natick, simultaneously unveiled discount pricing programs in Massachusetts this month. Under the plans, both companies sell 30-day prescriptions for generic treatments at $4 apiece. Wal-Mart sells 331 drugs at the discounted price, and BJ's includes 292 in its program, which will be offered at stores in 10 states.

Target Corp. expanded its $4 for 30-days supply generic drug program to all of its US pharmacies in response, moving beyond states where it was matching the plan offered by rival Wal-Mart. The discount retailer had previously matched the list of drugs being sold for $4 at Wal-Mart, but only in states where Wal-Mart Stores Inc. was offering the plan.

Consumer advocates and healthcare economists said that while lower prices will benefit some consumers, especially those without insurance, discount programs like BJ's and Wal-Mart's will not likely have a major impact on the retail drug industry because they exclude brand-name treatments and many generics. Of the 10 most-prescribed drugs in the United States as tabulated by IMS Health, a market research company, only the antibiotic amoxicillin is available for $4 at BJ's and Wal-Mart. But Wal-Mart said that according to RxList, an Internet drug index, 4 of the top 20 prescribed medications in the United States are available for $4, including atenolol, a treatment for high blood pressure, and furosemide, a diuretic.

Walgreen Co. and CVS Corp., the nation's two largest drugstore chains, said they will not match the $4 generic prices. The chains said shoppers will realize that only a small fraction of generic medications are included in the Wal-Mart discounts. They also are betting that customers with health insurance will be willing to pay a bit more, in $5 and $10 co payments, for more convenient locations. And seniors enrolled in the Medicare prescription drug plan already enjoy $3 co payments, Walgreen said.

Mom-and-pop drugstores, meanwhile, said they won't attempt to match the Wal-Mart discounts because generic drugs are crucial to their profits.

Wal-Mart has attracted strong criticism from the National Community Pharmacists Association , a trade group for independent drugstores. It has analyzed Wal-Mart's list of discounted drugs and said that the count of 331 generic prescriptions is inflated because it lists the same drugs in multiple strengths. It has called Wal-Mart's move a "publicity stunt" aimed at boosting store traffic.

"There's over 5,000 generic drugs on the market," said Douglas Hoey , the association's chief operating officer.

-Adapted from “Target offers $4 generics at pharmacies”, from the Boston Globe, by Reuters, November 21, 2006; “$4 drug program imitated, criticized; Specialists see limited impact” by Christopher Rowland and Jeffrey Krasner, The Boston Globe, November 17, 2006; “Wal-Mart may start $4-drug plan here” by Christopher Rowland, The Boston Globe, November 16, 2006, including material from Bloomberg News.

11/06