Wal-Mart's $4 Generic Drugs Could Shake Up Entire Pharma Sector

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Wal-Mart Cuts Prices for Many Generic Drugs to $4

Summary: Wal-Mart (WMT) will cut the price of some 150 older generic drugs to just $4 for a 30-day supply, beginning with its Florida stores and extending to its nationwide stores beginning later next year. The price point on some drugs will be up to 75% cheaper than competitors such as Walgreen (WAG). If Wal-Mart expands the price cuts to the most popular generic drugs, as many expect, pressure will be felt along the entire pharma retail drug chain. Stocks of generic drug makers and drugstore chains fell on the news -- CVS (CVS) was down 8% and Walgreen 7%. The big pharmacy-benefit managers, or PBMs, should also be squeezed if Wal-Mart expands the plan. Full WSJ article >
Related links: Wal-Mart's press release • Wal-Mart's Generic Prescription Plan: The Connection to Pharmacy Benefit Managers and The Big Drug Chains • Wal-Mart's Prescription Drug Plan Could Impact Entire U.S. Health Care System • Conference call transcripts: WMT 2Q07 1Q07

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