Retailing giant Wal-Mart announced a new program that will offer consumers $4 prescriptions for generic drugs (you can see the full list here as a .pdf: WMT-druglist).
Several commentators have already pooh poohed this as a mere publicity stunt in an election year.
Walgreen (WAG) and CVS (NYSE:CVS) and and other pharmacies have gotten shellacked on the news -- as well they should. Target (NYSE:TGT) was relatively unchanged, while Rite Aid (NYSE:RAD) has been a disaster for too long to remember. Wal-Mart crushed many of the inefficient or simply "less efficient" supermarkets when they moved into food retailing -- I would expect they could have a similar impact here.
In addition to selling this as a retail loss leader, I wouldn't be surprised if Wal-Mart rolled out a targeted program for certain corporate health care providers -- think either GM or Ford. It would be nice if somehow GM or Ford could lop off a few $100 from the cost of manufacturing each vehicle.
And given Wal-Mart's heft, this could very easily have a significant impact on the entire health care system in the United States.
The program will be launched tomorrow starting in 65 stores (Wal-Mart, Neighborhood Market and Sam's Club pharmacies) in Tampa Bay, Florida; It will expand statewide area, and will be expanded to the entire state in January 2007, and expanded nationwide later in the year.
Key components (via WMT's press release) include:
• $4 pricing will be available to all pharmacy customers with a doctor's prescription that can be filled via generic.
• This program will be available to the uninsured; Insurance will be accepted.
• The program presently covers 291 generic medications from many of the most common therapeutic categories.
• The medicines represented are used to treat and manage conditions including allergies, cholesterol, high blood pressure and diabetes; Some antibiotics, antidepressants, antipsychotics and prescription vitamins are also included.
Fascinating stuff . . .