Before we review our earnings, I’d like to address Wal-Mart’s announcement last week regarding the selected generic medications that they’ll offer for $4. Our initial review of the program leads us to believe it won’t significantly impact our business. Nearly 95% of our pharmacy patients have prescription insurance coverage, meaning they’re responsible only for a small co-pay. For the 291 drugs that Wal-Mart will sell for $4, the average co-pay at Walgreens is $5.30 and for Medicare Part D patients, it’s only $3.18.
I should also point out that Wal-Mart’s program covers less than 300 generic medications, while our pharmacies stock about 1,800 different generics. Over the years, our convenience, locations and services have proven to be bigger factors for our patients than a few dollars in price difference.
The full conference call transcript is here.
See also Barry Ritholtz' discussion of the impact of the price cut on the retailers and Larry Abrams look at the implications for the pharmacy benefit managers -- Medco Health Solutions (MHS), Express Scripts (ESRX) and Caremark (CMX).