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Target Matches Wal-Mart's $4 Generic Rx Price

Walgreens Sits It Out, Small Pharmacies Rattled

September 23, 2006

• Bill Banning Drug "Pay-For-Delay" Gets Hearing • Drug Costs Rise Less Quickly, Study Finds • Coping With Costly Prescriptions • Proposed Settlement Could Lower Prescription Drug Prices • FDA: Baltimore Pharmacies Selling Expired and Counterfeit Drugs • Some Drug Prices Surging 100 Percent Or More • Kmart, Schnucks Expand Generic Rx Discounts • Coming Soon: Generic Drugs from China • Safeway Introduces Generic Drug Discounts • Medicaid Cuts 'Devastating,' Pharmacies Warn • Kroger Expands Its Generic Drug Discount Program • Supermarkets Launch Generic Drug Discount Programs • Drug Prices Can Vary Widely, Survey Finds • Wal-Mart Adds More Generic Drugs To Discount Plan • FDA Finds Problems with Online Drugs • Wal-Mart Expands $4 Generic Program • Walgreens.com's Pharmacy Gets Top Rating • Popular Blood Pressure Drug Goes Generic • Wal-Mart Expands Generic Drug Plan • Consumers Get Little Drug Price Information From Their Doctors • Florida Pharmacy Offers Generics Online for $3.79 • Wal-Mart Adds 12 More States To $4 Drug Program • Wal-Mart Expands $4 Generic Drug Program To 14 More States • Report: Shopping Around Beats Medicare Drug Prices • Drugs by Mail: Money Saver or Rx for Disaster? • Wal-Mart Expands Its Generic Drug Discounts • Feds Give Up on Canadian Drug Crackdown • Target Matches Wal-Mart's $4 Generic Rx Price • Congress OKs Drug Shopping Trips To Canada • Seniors Bemoan "Donut Day" • Wal-Mart Cuts Generic Rx Prices To $4 In Florida • AARP: Drug Prices Still Rising • Illinois Sues 48 Drug Companies • Pharmacy Benefit Managers Scrutinized • Survey Shows Value of Comparison Shopping

One step behind rival Wal-Mart, Target says it will also sell generic prescription drugs for $4 -- setting off what's likely to be a chain reaction that creates a completely new and cheaper pricing structure for America's off-patent medicines.

Target said that it would match Wal-Mart's prices in the Tampa, Fla., area, where Wal-Mart began offering the cut-rate prices Friday. The Minneapolis-based company didn't say whether it would match the $4 price elsewhere.

Another major competitor, Walgreens, is so far on the sidelines.

"We have no plans to do a program similar to Wal-Mart's," said spokesman Michael Polzin. He noted Wal-Mart's program covers only a fraction of the 2,000 generics Walgreens and others sell.

What's more, 95 percent of Walgreens customers have insurance, and for the 291 medications Wal-Mart is selling for $4, the average co-pay of $5.30 for nonseniors and $3.18 for seniors with Medicare Part D, Polzin said.

Wal-Mart has said it will expand the $4 price on nearly 300 generics to all of Florida by January 2007 and, if it proves successful in Florida, extend the program to other parts of the country.

The news was unsettling to small pharmacists, already facing tough competition from large grocery and pharmacy chains, as well as difficulties grappling with the new Medicare Part D program for prescription drugs.

But for retirees and others struggling to pay for prescription drugs, the news was greeted as a life-saver.

"Holy moley, this is phenomenal," Barbara Waks, an Aventura, Fla., resident told the Miami Herald. For her drugs, she has been insisting on brand names, either begging doctors for samples or purchasing them from Canada. "But now that I hear this I'm going to see if I can substitute generics," she said.

The Herald cited one example of the new savings: Enalapril, a frequently used blood-pressure medication, costs $18.09 at most CVS pharmacies, $19.49 at Target, $21.95 at Publix, $25.99 at many Walgreens and $45.29 at Friendly Drugs of West Hollywood, according to MyFloridaRX.com, a state-operated website.

Wal-Mart's price at a Pompano Beach store is currently listed as $18.54. It will be less than a fourth of that in January. The new $4 enalapril will even be cheaper than the price at CanadianDrug store.com, which charges $9.36, the newspaper said.

WakeUpWalMart.com, an anti-company site run by a union, criticized Wal-Mart for not including generic Zocor in its bargains and noted that, while the company had boasted it was lowering prices on nearly 300 generics, the company's list showed "only 124 separate medicines," many in multiple doses.

Still, of the top 10 selling generics in 2005, Wal-Mart and now Target will be offering six of them for $4.

"Each day in our pharmacies we see customers struggle with the cost of prescription drugs," said Wal-Mart CEO H. Lee Scott, Jr. "By cutting the cost of many generics to $4, we are helping to ensure that our customers and associates get the medicines they need at a price they can afford. That's a real solution for our nation's working families."

The Alliance for Retired Americans applauded the action.

"The federal government should look to its friends at Wal-Mart and see that negotiating bulk discounts on prescription drugs can reduce the cost to consumers," said Edward Coyle, executive director of the Alliance.

The company said the $4 price will be available to both the insured and the uninsured alike. The generic drugs included in the program 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, the company said.

Should the program prove successful in Florida, company officials say they expect to expand it to other states during 2007.

"Competition and market forces have been absent from our healthcare system, and that has hurt working families tremendously," Scott said. "We are excited to take the lead in doing what we do best – driving costs out of the system – and passing those savings to our customers and associates."

The announcement comes at a time of growing frustration with the new Medicare Part D drug benefit, that features a so-called "donut hole" of liability.

The program covers drug costs up to a certain level, then provides additional coverage at a higher level. Consumers whose drug costs fall between those two points receive little or no benefit.

Wal-Mart officials say their generic drug program will help alleviate a major challenge for seniors who have fallen into the "doughnut hole" coverage gap in their Medicare Part D prescription drug plans and now find themselves responsible for paying 100 percent of their prescription medicine costs.

"Fifty-bucks for a year's supply of prescription drugs is a pretty darn good deal for consumers," said Sen. Bill Nelson (D-FL), an outspoken proponent of giving people access to lower-cost prescriptions. "Because Wal-Mart has the ability to shape the market, maybe other retailers will follow suit."

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