Wal-Mart offers affordable prescription drugs


By Michael Bott

DAVIS, Calif. – Wal-Mart launched its $4 generic prescription drug program in Florida last September, with the intention of taking it nationwide in January 2007. The program was more successful than first anticipated, according to Wal-Mart spokesperson Jami Arms, and went national by the end of November 2006.

However, while Wal-Mart claims that its intention is to bring affordable prescription drugs to working-class families, skeptics say otherwise.

Generic drugs are identical in composition to their name-brand counterparts yet are more affordable, according to Dr. John Grubbs, director of pharmacy for the University of California-Davis Health System.

“The reason the price is so much less is primarily because the name-brand manufacturer had to do all the clinical trials to get it approved, so they have to recover their cost,” Grubbs said.

Wal-Mart offers 143 different generic drugs spanning categories from allergy to seizure to antidepressants for $4, according to a list released by Wal-Mart. Drugs priced at $4 make up about 25 percent of sales in the company’s pharmacies.

“We just saw such a huge consumer demand for the product and we wanted to offer it to as many people as possible, as soon as possible,” Arms said. “This is Wal-Mart doing what it
always does, which is drive cost out of the industry.”

Some critics, such as Wake Up Wal-Mart, are skeptical that Wal-Mart has the good of the working class in mind, equating the $4 generic-drug program to a publicity stunt.

“Cutting prescription drug costs is obviously a good thing, but to use it as a publicity stunt is completely disingenuous when you fail to provide health care to half of your employees,” said Paul Blank, campaign director for wakeupwalmart.com.

“They were a little misleading in how they announced the program as well. They say it covered 300 prescription drugs when it only covered 140.”

One benefit of the program, according to Blank, is that after Wal-Mart cut generic-drug prices, other large retailers such as Target and Costco followed suit.

“We are proud to have introduced competition to an area where it has been too scarce for too long,” said Wal-Mart President and CEO Lee Scott in a Nov. 27 press release. “And, we hope others will continue to join us in making prescription medicines more affordable and accessible for all Americans.”

In fact, Wal-Mart is now selling many generic drugs at a loss.

“In some cases, the $4 price can be pretty cheap,” Grubbs said. “The price to dispense the drug is about $10. … They are absolutely losing money on those sales.”

This causes people like Grubbs and Blank to wonder if Wal-Mart is being honest about its motives. Both said they think Wal-Mart introduced the program to increase foot traffic in stores and to take attention off of the fact that it does not provide health care for many employees.

Regardless of Wal-Mart’ s intentions, Grubbs said he believes generic drugs will play an increasingly important role in lowering prescription-drug costs and extending health care
coverage to more Americans.

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