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Wal-Mart drops drug prices, shakes up market — again

Wal-Mart continued its first-mover tactics in health by dropping the price of prescriptions again. This time, the target is maintenance meds, which Wal-Mart will price at $10 for a 90-days supply.

This move puts Wal-Mart squarely in the pharmacy benefits management (PBM) segment vis-à-vis ExpressScripts, Medco, and the big PBM players. The three-month mail order med business is the lucrative turf of PBMs. Wal-Mart’s first move into this space was in 2006 when the company priced many 30-day prescriptions at $4, shaking up the industry. I wrote about that market disruption here in January 2008.

Wal-Mart will also offer over 1,000 over-the-counter (OTC) meds for $4 and under. These will all be Wal-Mart’s private labels for popular OTC brands.

As the company with the red bulls-eye did the last time Wal-Mart dropped the price of meds, Target responded as a fast follower by saying they, too, will match the Wal-Mart prices for a 90-day supply of drugs. Target’s program will expand the assortment of $4 Rx drugs and the 90-day supply of these medications for $10 and private-label OTC medications for $4 or less.

While price transparency is what retail pharmacy should be all about, Consumer Reports
found that prices across and even within pharmacy chains can
significantly vary — by $100 or more from the same drug, from store to
store and within the chain.

Consumer Reports surveyed pharmacies’ prices for three brand-name meds
and one generic drug. The range of retail prices for each drug were:

  • Pfizer’s urinary incontinence drug Detrol = $365 to $551
  • BMS’s and Sanofi-Aventis’ blood clot drug Plavix = $382 to $541
  • King Pharmaceuticals’ hypothyroid drug Levoxyl = $29 to $85
  • Generic Fosamax for osteoporosis (alendronate) = $124 to $306.

Consumer Reports also found that independent pharmacies can be
price-competitive, given these price ranges, and can offer a higher
level of service — especially access to pharmacists for personal
consults.

In another prescription drug update, a study published in the
American Journal of Public Health found that one in four Americans share or
"borrow" prescription drugs from each other. Most common shared drugs
include those for categories in allergy, pain (like Darvocet and
Oxycontin), and antibiotics.

Women are twice as likely to share prescription drugs as men.

Jane’s Hot Points: Almost one-third of Wal-Mart’s nonprescription
drugs now sell for $4 or less, luring people also shopping for
groceries and clothes. The price of gas is a powerful incentive for
consumers to look for one-stop shopping, and Wal-Mart can deliver on
this.

That consumers respond to price incentives for prescription drug
shopping is in general healthy; it’s a rational economic response from
the pages of Adam Smith and market theory. That people "share" drugs
like OxyContin and antibiotics, however, is a rational economic
response; but not sound public health. Here’s an example of where
market forces can drive bad health behavior.

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ddorlandoRitaKimberly S. WoodruffLilyJames Wilson Lara Recent comment authors
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ddorlando
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Kimberly, http://www.lowestmed.com has a discount card too. They say the discount is between 10% and 85%, depending on the drug of course. It looks like the card is accepted at most major pharmacies.

ddorlando
Guest

I usually buy my prescription drugs at Walmart, but I really hate to wait in line. For some, like my family members on the East Coast, the closest Walmart is 20 minutes away. I love their prices, but sometime it just isn’t convenient. The other day I came across http://www.lowestmed.com, which compares drug prices at local pharmacies. I use this site now before I get my prescriptions sent off to a pharmacy. Especially, when I don’t wait in a line for an hour at Walmart.

Rita
Guest

Kimberly, I agree with the comment above about RxDrugCard. They even have drug prices on their website to check that they are the lowest prices before you sign up. Check it out — http://www.rxdrugcard.com.

Kimberly S. Woodruff
Guest
Kimberly S. Woodruff

I need a card that will save me as much money as possible.
Thanks

Lily
Guest

I’ve seen ads on TV for Caduet. It has two ingredients. One is Amlodipine and the other is Atorvastatin. With my RxDrugCard I can get 30 tablets of Amlodipine for $9 and 30 tablets of Simvastatin for $9. I’ll bet they are charging more than $18 for this new drug! Don’t pressure your doctor into giving you something just because it’s new. Do your homework. Find a drug card like I did at http://www.rxdrugcard.com. I think that RxDrugCard.com is the best drug card available for prescription discounts.

James Wilson Lara
Guest
James Wilson Lara

Walmart has cheap prices and they do have one of the best deals in town. however, i have found that America’s Pharmacy in Tamarac FL 33309, close to Fort Lauderdale has better prices and is willing to match or even price cut the large chain pharmacies. I have noticed that they have a personal touch in knowing their patients names, very knowledgeable, and great customer service. Try them out and you will see their great deals and friendly service. also, they carry lots of Medical Supplies, DME, wheel chairs, compression stockings, and great gift ideas such as purses, men’s wallets… Read more »

Bill Bennett
Guest

Of all the healthcare segments, pharmacy is the most convoluted. PBMs started as record keeping and eligibiility services and continued to do more and more to increase income streams. Predatory pricing, retention of point spreads, rebates and games with wholesale pricing in mail order has made them incredcibly wealthy. They do no research, manufacture no product, warehouse no supplies and distribute no product, yet make more than most of the other players in the industry. A large fine is nothing to them and they just continue their practices. With pharmacy being an average of 20% to 22% of claims paid,… Read more »

weekend health kibitzer
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weekend health kibitzer

George, you know that brand-only design is coming. At least 2 insurers/pbms have had it in the works for a couple of years, prodded by employers as I understand it. Also agree with you on the quality of care issues that come from fragmented data. One possible, partial solution; id card that doubles (or triples) as information token and payment form, so any retail transactions are passed to consumer’s choice of data aggregator(s). Again, the technology is already developed (and I’m not referring to the debit/credit card systems used by HSA processors. Conventional processing rails are ok only for very… Read more »

rational prescriber
Guest

Wal-Mart understands the increasingly “cosumer-driven” market. Check out http://www.medsane.com for other cost-effective medication options.

bobo
Guest
bobo

Interesting. If I understand this correctly, walmart offers very low pricing for generics and OTC drugs? I do not have the numbers to back my claim up, but I recently had a drug rep in my office who detailed a drug that will soon loose patent protection. As I reminded her about upcoming generics, she said: “There are not that many generic drug makers any more.” (don’t know whether she is right, anyone here knows?)I also know that some pharmaceutical companies pay generic manufacturers NOT to produce the generic. Could it be that walmart’s strategy to be the cheap retail… Read more »

George Van Antwerp
Guest

It is a big deal and should save people money. Getting 90-day supply and including OTCs certainly should have surprised a few people and made some consumers save money. Will it move marketshare is the key question? People aren’t as sticky to their pharmacy as they once were. At what volume is it profitable for WalMart to do this or is it a loss leader for traffic? And, I think an interesting question is whether you could ever see a pharmacy plan that only covers the brand drugs. A few years ago, I thought you would see a generic only… Read more »